Iran urges OPEC to prevent oil price fall
By Sara Rajabova
Iran has called for unity among member states of the Organization of the Petroleum Exporting Countries (OPEC) to curb falling crude prices.
Following a sharp drop in global oil process, Iran’s Oil Minister Bijan Namdar Zanganeh called on OPEC members to avoid adopting any position which would put a question mark over the organization’s unity, Press TV reported.
He said the implementation of any decision at OPEC depends on consensus among all members.
Zanganeh noted that over 50 years of OPEC’s activity shows member states have always reached consensus even in “difficult circumstances”.
OPEC members - Algeria, Angola, Ecuador, Iran, Iraq, Libya, Kuwait, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates, and Venezuela - pump about 40 percent of the world’s oil with Iran being currently the organization’s third largest oil producer.
Zanganeh expressed hope that the 166th OPEC ministerial meeting, scheduled to be held in Vienna on November 27, will yield satisfactory results thanks to consensus among all member states.
OPEC has no bearing on the market when crude prices touch or exceed $ 100 per barrel, Zanganeh said, adding the oil group will make its presence felt only when prices drop.
Meanwhile, the members of Iranian parliament's Energy Commission called on OPEC members to decrease oil production level to prevent falling oil price from falling more.
Two Energy Commission members told Trend Agency on November 18 that low oil price is not favorable for OPEC members and the cartel should take measures to support higher oil prices.
According to OPEC's latest monthly report, the 12 members of the cartel decreased oil output by 226,400 barrels to 30.253 million barrels per day, while the ceiling level of oil output should have been at 30 million barrels per day due to the agreement among the members.
On the other hand, OPEC says that the demand for OPEC crude is estimated at 29.5 mbpd in 2014. In 2015, the figure is estimated to reach 29.2 mbpd.
Ali Marwi, Head of the Energy Commission of Iranian parliament said Iran demands a "serious decision" from OPEC members at the upcoming meeting.
"A serious decision needs to be made to protect members' national interests. Most oil producers set their yearly budget based on above $80 per oil barrel price. OPEC should take a concrete step to support high oil prices, namely a price which is logical for both oil producers and consumers," he said.
Previously, Iranian government has announced that a $100-oil price is reasonable and logical.
Another member of Energy Commission Abdolkarim Jomeiri noted that OPEC members should behave in a way that makes a balance between oil supply and demand, and Iran calls on the OPEC members to decline crude oil production.
Zanganeh earlier said Iran will make information exchange with other 11 members to evaluate the situation to make decision how OPEC can stabilize the oil prices.
He also said that Iran will compensate for the effect of low oil revenues on upstream projects by issuing credits from the National Development Fund to the contractors which are engaged in upstream projects.
Iran's yearly budget is based on a $100/barrel oil price, but according to OPEC's official website, its oil basket price dropped to $73.90 on November 17 compared to $107.89 in mid-June.
According to the yearly budget, Iranian government should deliver 29 percent of oil revenues to the National Development Fund of Iran (NDF) to be used as financial facilities in the private sector's projects. According to estimations, Iran would face a $2-billion deficit in oil revenues to meet the considered figure in the budget law.