Oil Ministry Official: Agreement on Quotas at OPEC is Unlikely

Mehdi Asali, the director of OPEC affairs and energy relations at Iran's Ministry of Oil, deemed it unlikely that an agreement on production quotas among member countries of OPEC would be reached at the upcoming meeting of oil ministers in Vienna. In an interview with Shana, the information network of the Iranian Ministry of Oil, Asali stated: "The discussion over production allocation is a complex and time-consuming issue, as reaching an agreement on quotas requires stability in production among countries for a reasonable period, which is currently not achievable; therefore, we expect to reach it in the future." He also emphasized Iran's position at the 169th OPEC meeting, saying, "While supporting OPEC's actions to restore market stability around fair and reasonable oil prices in the current conditions, Iran will not commit to halting its production increase." According to Asali, "Market analysis, decision-making on OPEC's oil production levels, the selection of a new secretary-general, and decisions regarding the return of the African country Gabon to OPEC" are among the agenda items for the 169th OPEC meeting, scheduled for Thursday, June 3, at OPEC's headquarters in Vienna, Austria. Bijan Namdar Zangeneh, Iran's Minister of Oil, also emphasized in an interview with Shana that "the doubling of Iran's oil exports has not only had a negative impact on the market but has been well absorbed by it." The disagreements between Iran and Saudi Arabia in recent months have hindered OPEC's consensus on halting the increase in the organization's production levels. Iran believes that after the lifting of sanctions, it should be able to produce as much as it did before the sanctions were imposed, while the Saudis and their allies in OPEC believe that Iran should also participate in the organization's production stabilization plan. These disagreements have led to the practical dismantling of the previous OPEC quota system and the failure to implement coordinated decision-making for stabilizing production ceilings. Recently, Reuters reported based on unofficial statistics that Iran's oil production has exceeded 3.5 million barrels per day, surpassing the level of production in 2011 when sanctions against Iran were intensified. The agreement between Iran and the international community regarding Iran's nuclear file and the lifting of sanctions coincided with an unprecedented drop in oil prices, preventing the increase in Iran's oil production and exports from having a significant impact on Iran's macroeconomic indicators. The price of a barrel of OPEC's oil basket had dropped to $27 in January of last year, the first month of the calendar year, which was considered the lowest level in a decade; however, in recent months, oil prices have gradually increased, reaching a fluctuation range of $50 per barrel. Mehdi Asali, in his analysis of the global oil market, stated to Shana: "There is still over one million barrels of excess production in the market, but this surplus is decreasing due to production disruptions in some OPEC member countries and some non-member countries, and it is expected to decrease further in the upcoming seasons." According to Asali, "With increasing demand on one hand and the continued reduction in supply from non-OPEC countries on the other hand, it is expected that oil prices will remain at a relatively balanced level." This official from Iran's Ministry of Oil also describes "the slowdown in economic growth of major developing countries" as a "constant risk of price drops in late calendar year." Asali predicted oil prices in the last three months of the current calendar year to be in the range of $40 to $55 per barrel. Bijan Zangeneh also mentioned in his interview with Shana that prior to the OPEC meeting, he would meet with representatives of major oil companies worldwide to discuss Iran's oil, gas, and petrochemical plans.