Russia Says Iran May Join Oil Freeze After Boosting Output

Oil Falls as Iran Rejects Freeze
  • Iran's Oil Minister Zanganeh met with Russia's Novak in Tehran
  • Gulf nation aims to boost output by 1 million barrels a day

Iran may join other oil suppliers in freezing production after restoring its own output to levels before sanctions were imposed, Russian Energy Minister Alexander Novak said after meeting with the Persian Gulf nation’s oil minister.

Iran has “reasonable arguments” not to be constrained by the freeze for now, Novak told reporters at the Russian embassy in Tehran. “Iran may join us in the freeze with time,” he said Monday. “This is a normal, constructive position from our Iranian partners.”

Major oil producers are likely to meet in April to discuss a proposal to cap output at January levels to stabilize the market, with Qatar’s capital Doha a possible location for the talks, Novak said. He said he hopes Iran’s Oil Minister Bijan Zanganeh will participate. “It is decided that a joint meeting of OPEC and non-OPEC producers will convene,” Zanganeh said, according to the Iranian Oil Ministry’s Shana news service, without specifying whether Iran will attend.

Iran, the second-largest OPEC producer before sanctions intensified in 2012, is seeking to recoup its share of the oil market after economic sanctions were lifted in January. Saudi Arabia, Russia, Venezuela and Qatar in February proposed an accord to cap oil output and reduce a worldwide surplus. Crude prices extended gains after their initial meeting on Feb. 16 and have climbed more than 35 percent since slumping to a 12-year low in January. 

Price Forecast

Prices may have passed their lowest point as shrinking supplies outside the Organization of Petroleum Exporting Countries and disruptions inside the group erode global oversupply, the International Energy Agency said March 11. Oil will probably end the year at $45 to $50 a barrel, Novak told reporters. Brent crude was trading 2.8 percent lower at $38.41 a barrel at 10:27 a.m. on Tuesday in London.

Iran is seeking to boost production by 1 million barrels a day by June, the country’s Seda Weekly magazine reported, citing an interview with Amir Hossein Zamaninia, deputy oil minister for commerce and international affairs. “The positions of Russia about Iran’s return as well as resumption of stability to the oil market were encouraging and very positive,” Zanganeh said, according to Shana.

Iran increased output by 187,800 barrels a day to 3.13 million a day in February, the biggest monthly gain since 1997, OPEC said Monday in its monthly report. The country plans to boost crude output to 4 million barrels a day, the highest level since 2008, Zanganeh said, according to an Iranian Students News Agency report on Monday.

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