Global oil deal may see Iran exempt from output cap
Russia’s energy minister says a future global oil deal on production ceiling might temporarily exempt Iran from freezing its output level.
Alexander Novak said Monday that an international agreement to freeze oil production could be signed in April, which may exclude Iran as it has the right to boost output after years of sanctions.
The comments followed the Russian energy minister’s talks with Iranian officials in Tehran.
Russia, Saudi Arabia, Qatar and Venezuela, leading oil producers, met in the Qatari capital last month and expressed readiness to hold output at January levels if other crude producers followed suit.
A final deal on production freeze to support oil prices, which have fallen 65 percent since peaking in June 2014 due to oversupply, is seen next month, possibly in Doha again, Reuters quoted Novak as saying.
The Russian minister noted that the agreement could exclude Iran as it seeks to regain market share after sanctions imposed over Tehran's nuclear program were effectively lifted in January.
"We share (the view) that Iran is in a special situation. The sanctions that had been introduced had materially hit (its) output," Novak said after meeting with his Iranian counterpart Bijan Namdar Zangeneh.
Iran now reportedly produces around 3.1 million bpd of oil. The sanctions had cut crude exports from a peak of 2.5 million bpd before 2011 to just over 1 million bpd in recent years.
"On the whole, Iran supports the need for coordination between oil exporters, including a possible freeze. But Iran's position is that they have to first restore their production volumes ... After that, they are ready to join the freeze," Novak said.
He said oil markets were now more balanced, but yet called for a solid deal on stabilizing output, "otherwise the markets will face more uncertainty, which will lead to more volatility."
The Russian official expected oil prices to be between $40 and $50 per barrel by the year-end, compared to just below $40 currently.
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