Iran’s plan to keep boosting crude production until it regains its OPEC market share is dimming prospects of collective action by major producers to freeze output, according to Patrick Allman-Ward, chief executive officer of Dana Gas PJSC.
“I’m not overly optimistic about an oil freeze being agreed,” Allman-Ward said in a Bloomberg Television interview in Dubai on Sunday. “There’s pressure with Iran working to increase production. The environment is not that conducive to a freeze.” Dana Gas produces hydrocarbons from Egypt to Iraq and sells condensate, a light oil.
Iran lost its position as OPEC’s second-largest producer after the U.S. and European Union tightened sanctions on its economy in 2012. While the country supports action to stabilize the market, it won’t participate in a freeze in output before regaining its pre-sanctions share of OPEC production, state-run news service Shana reported Friday, citing Oil Minister Bijan Zanganeh. OPEC said this month that its members will discuss markets at a September gathering of the International Energy Forum in Algiers.
Members of the Organization of Petroleum Exporting Countries and Russia failed at ameeting in Doha in April to agree to limit production after Iran declined to attend and Saudi Arabia refused to proceed without all of the OPEC states participating. Suhail Al Mazrouei, energy minister of the United Arab Emirates, said Saturday on Twitter that any OPEC policy decision must include all members.
Producers that destabilized oil markets have the greatest responsibility to steady them, Zanganeh said, according to Shana, without identifying any such countries. Iran should be let to recoup its share of global sales, he said.
Iran has regained about 80 percent of the market share it held before sanctions intensified in 2012, Mohsen Ghamsari, director of international affairs at National Iranian Oil Co., said in a July 11 interview. Ghamsari said at the time that Iran was exporting about 2 million barrels of its daily output of 3.8 million. It’s now pumping about 3.85 million barrels of crude a day, Zanganeh told Fars news agency on Aug. 10.
Saudi Arabia, OPEC’s biggest producer, is willing to discuss a possible freeze, Khalid Al-Falih, the country’s oil minister, said Friday in an interview. Al-Falih said he doesn’t “believe that an intervention of significance is required” and doesn’t support a production cut. The kingdom boosted July output to a record 10.67 million barrels a day, according to OPEC.
Iran will be wary of curtailing its output when Saudi Arabia, Iraq and other producers may seek to sell more, Robin Mills, chief executive officer of consultant Qamar Energy in Dubai, said Sunday by phone.
“If Iran’s not in the agreement, that torpedoes it,” he said.