Zangeneh: We Do Not Need Anyone's Permission to Increase Oil Production

While the OPEC Secretary General has deemed the reduction of oil production by other member countries of the organization to increase Iran's production as "unlikely," the Iranian Minister of Oil announced that increasing Iran's oil production "does not require anyone's permission." According to the state news agency IRNA, Bijan Zangeneh, Iran's Minister of Oil, on Wednesday, December 2, referred to letters sent to OPEC, stating that Iran did not write these letters for the approval of OPEC members. According to Mr. Zangeneh, the purpose of sending these letters was to "inform and ensure" OPEC members' compliance with the production ceiling and also to "consider Iran's oil in the production plans" of this organization. The 168th meeting of the Organization of the Petroleum Exporting Countries (OPEC) is scheduled to be held in Vienna, Austria, on Friday. Meanwhile, Mehdi Asali, the Director General of OPEC Affairs at the Iranian Ministry of Oil, reported on Tuesday, December 1, that Bijan Zangeneh, in a letter to the OPEC Secretary General, emphasized the increase of Iran's oil production after the lifting of sanctions and requested a reduction of 1.3 million barrels per day from the daily production of other member countries of the organization. Mr. Asali stated on Wednesday that the reduction of OPEC oil production "is not possible without the cooperation of Saudi Arabia and its allies." According to Mr. Asali, under the current conditions of relations between Iran and some Gulf countries, it is "unlikely" that these countries will reduce their production to increase Iran's production unless political relations between Iran and these countries improve. OPEC, the Organization of the Petroleum Exporting Countries, lifted quotas in 2012 and set a production ceiling of 30 million barrels per day. However, this year's production has consistently exceeded this amount due to record production in Saudi Arabia and Iraq. Meanwhile, according to Reuters, Saudi Arabia is reducing its crude oil prices for delivery to Asian customers in January to maintain its market share and compete with other exporters. OPEC's historic decision in November 2014 to increase production to maintain market share against competitors was effective, raising oil prices to around $65 per barrel. However, six months later, the price dropped to $45, while mid-last year, oil prices were $115. Some members, including the Venezuelan Minister of Oil, are talking about a return to $20 oil, which occurred around the year 2000. They relate this to the lifting of sanctions from Iran's economy later this year. Iranian oil ministry officials have announced that immediately after the lifting of sanctions, Iran's oil sales will increase by 500 to 600 thousand barrels per day, and within a year, the increase in exports will reach one million barrels per day. However, the International Energy Agency's assessment is that Iran will only add 400 to 600 thousand barrels to its oil production after sanctions and in the second half of next year.