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Tehran says lifting of sanctions helpful for oil prices’ recovery

23 January 2015 17:18 (UTC+04:00)
Tehran says lifting of sanctions helpful for oil prices’ recovery

By Sara Rajabova

Iran says the removal of economic sanctions imposed on the country over its nuclear program can help oil prices rebound to a logical level.

“With the removal of sanctions against Iran, the global oil price will become rational,” Mehr news agency quoted Bijan Namdar Zangeneh, Iranian Petroleum Minister as saying on January 23.

Zanganeh added that the lifting of economic embargoes against Iran could shore up global oil prices.

He also said falling oil prices would not have an impact on the construction of mini liquefied natural gas refineries in South Pars oil and gas field.

“The plummeting global oil price has no impact on the economic justification for building the LNG refineries. So the construction of these refineries will be carried out accordingly,” he said.

Zangeneh also went on to say that there is no red line for cutting oil output level in the Organization of the Petroleum Exporting Countries.

His remarks come as oil prices surged following the news of the death of Saudi Arabia's king on January 23. Uncertainty, however, still lingers in the energy markets as investors are waiting to see if the kingdom will change its oil production policy amid plunging prices.

However, King Salman, Saudi Arabia’s new ruler said on Saudi national television that he will maintain the policies of his predecessor, Bloomberg reported.

Brent crude oil, the global benchmark, rose to $49.71 a barrel in London on January 23. West Texas Intermediate rallied as much as 3.1 percent.

Saudi Arabia is a key member of the OPEC body. The kingdom’s decision in late November not to slash output levels led to further falling prices.

Oil prices started to fall over increased supplies by certain countries such as Saudi Arabia, the largest producer in the OPEC and a lackluster global economic growth.

OPEC, which pumps out about 40 percent of the world’s oil, has so far refrained from cutting its production to balance the market due to opposition from Saudi Arabia.

Iran has criticized Saudi Arabia, the world's biggest crude exporter, for its lack of cooperation in preventing the fall in oil prices. However, Riyadh has said OPEC will not cut oil production even if oil prices fall to $ 20 a barrel.

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Sara Rajabova is AzerNews’ staff journalist, follow her on Twitter: @SaraRajabova

Follow us on Twitter @AzerNewsAz

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