Iran Says Higher Global Oil Prices Essential, signals willingness to cooperate with OPEC.

Iran Says Higher Global Oil Prices Essential, signals willingness to cooperate with OPEC. (IFPnews).

In a telephone conversation with Venezuelan President Nicolás Maduro on Monday, Rouhani commended the stance adopted by Caracas at an extraordinary meeting of the Organization of the Petroleum Exporting Countries (OPEC) in Algeria in favor of maintaining Iran’s oil quota and raising its oil output to pre-sanctions levels.

“All must make efforts so that the committee of experts would take decisions to clear the way for increasing global oil price in the [OPEC] meeting in November,” the Iranian president said, adding that OPEC countries must hold “serious negotiations” with non-OPEC producers in order to increase and stabilize oil prices at international markets.

He also called for expert-level meetings to determine member countries’ oil export quotas.

OPEC members agreed during their extraordinary meeting in Algiers, Algeria, on Wednesday to limit production in an effort to raise the low crude prices. They decided to cut production by 750,000 barrels a day.

Iran, however, has been exempted from the decision because of its exceptional situation of having been under sanctions for a number of years.

Since the removal of nuclear-related sanctions targeting its oil industry in February, Iran – which is OPEC’s third largest producer after Saudi Arabia and Iraq – has been boosting production in order to reach previous levels and has rejected calls on the country to freeze production as unfair.

Iran, whose production has reached 3.6 million barrels per day, insists on its right to increase its crude output to around 4.1-4.2 million barrels per day.

OPEC is yet to decide on how much each country should produce during its next meeting in Vienna in November.

Non-OPEC producers including Russia will also be invited to join the deal.


The Venezuelan president, for his part, said Tehran and Caracas have common and coordinated stances on regional and international developments, particularly on OPEC-related issues. Hmmm.....as i always said once Iran reaches pre sanction level of production they will talk, now who is willing to abandon part of his market?

Iran, South Africa Ink 8 Cooperation MoUs.

Iran, South Africa Ink 8 Cooperation MoUs. (Fars).

The MoUs were endorsed in Tehran on Sunday in the presence of Iranian President Hassan Rouhani and his South African counterpart Jacob Zuma.

The documents are aimed at broadening cooperation between Tehran and Pretoria in the fields of trade and industry, investment, agriculture, water resources management, insurance, exchange of information on money laundering, oil industry studies, culture and art.

Zuma, heading a high-ranking economic-political delegation, arrived in Tehran early on Sunday for talks on trade and economic cooperation.

He is accompanied by a 180-member delegation consisting of various cabinet ministers and a high-level business entourage. Zuma is scheduled to leave Tehran for the historic province of Isfahan on Monday.

Meantime, Iran and South Africa agreed to build petrochemical plants and oil refineries through joint ventures.

The agreement was reached during a meeting between Iranian Oil Minister Bijan Zanganeh and South African Energy Minister Tina Joemat-Pettersson in Tehran on Saturday.

During the meeting, the two sides also discussed oil and energy cooperation, including resumption of crude exports.

“Iran supplied 40% of South Africa’s oil imports before sanctions brought them to zero,” Zangeneh said, adding that “we are currently seeking to open this closed path and there are negotiations underway which we hope will bear result.”

“Right now, the main argument is over the price. Iran has announced that it will accept a price which is competitive in the market,” Zangeneh said.

Pretoria is also considering building an oil refinery that will process Iranian crude to bolster its petrol supply and reduce its dependence on foreign companies.

“We have asked them to present their proposals. Accordingly, Iran has invited them to invest in Iran’s refining and petrochemical sector like before,” Zangeneh said about the plan.

South African petrochemicals group Sasol had a 50% stake in Arya Sasol Polymer company, a joint venture with Pars Petrochemical Company of Iran. The venture produced ethylene and polyethylene used in the production of plastics.

“Arya Sasol used to carry out successful investment operations in Iran’s petrochemical industry but had to pull out of them after sanctions,” Zangeneh said. Hmmm........China and Iran putting their roots in African soil.

Iran will never sign oil production freeze agreement under preparation in Doha

Iran will never sign oil production freeze agreement under preparation in Doha. (Tass).

Iran will never sign the oil production level freeze agreement undergoing preparation in Doha, official spokesperson of Iran’s Petroleum Ministry Akbar Nematollahi said on Friday in an interview with IRNA news agency.

Iran’s oil minister Bijan Namdar Zanganeh will not attend OPEC's Doha meeting on April 17 in view of earlier scheduled contacts, Nematollahi said.

The spokesman added the minister has announced Iran's positions during bilateral or multi-lateral meetings with OPEC and non-OPEC producers and Iran will never sign Doha upcoming agreement.

Iran's representative in the OPEC Board of Governors Hossein Kazempour Ardabili will represent Iran in the upcoming meeting of OPEC and non-OPEC oil producing nations.

Nematollahi added Iran at the same time supports efforts of oil producing countries to stabilize the global oil market. IRNA reported Iran has always declared that it will not sign oil output freeze plan to retake its share of oil market and promote oil production to pre-sanctions era.

Russia’s Energy Minister Alexander Novak told TASS earlier the oil production freeze agreement may be reached without Iran’s participation.

The issue on keeping the oil production at the level of January 2016 will be discussed at the meeting in Doha on April 17. Most oil producing countries have earlier confirmed their participation.

Related: 

Iran oil exports surpasses 2 million bpd, willing to discuss production cuts once it reaches 4 million bpd.

Iran oil exports surpasses 2 million bpd, willing to discuss production cuts once it reaches 4 million bpd.

Iran oil exports surpasses 2 million bpd, willing to discuss production cuts once it reaches 4 million bpd. (Iranfrontpage).

“Iran’s exports of oil and gas condensate are now at more than 2 million barrels per day,” the minister told the Shana news agency in Tehran on Sunday.

Condensate is a light oil that is typically produced in association with natural gas.

Senior nuclear negotiator Abbas Araqchi earlier said Iran had raised its crude oil exports to 1.7 million barrels per day (bpd), but it faced challenges for returning to pre-sanctions levels when the country sold 2.5 million barrels.

“Our customers have gone and concluded deals with other countries. We have to find new clients and nobody can expect us to return to former export rates overnight,” he said.

Araqchi predicted Iran’s oil exports to hit 2.5 million bpd within a year.

The Islamic Republic exported about 1 million bpd of oil under sanctions. Since the lifting of those restrictions, the country has been ramping up production in a bid to regain its market share.

The oil market is saturated amid oversupply by major producers such as Saudi Arabia.

The kingdom is currently pushing for a production freeze provided that other oil producing nations stop their output at current rates.

On Friday, deputy crown prince Mohammed bin Salman said Saudi Arabia would only freeze its oil output if Iran and other major producers did so.

Zangeneh has said Iran would take part in discussions on a possible production freeze after its output reached 4 million barrels per day.

The minister had already dismissed the idea of a production freeze by Iran as “a joke.”

“We do not intend to sanction ourselves again after coming out of the sanctions,” Deputy Petroleum Minister Amir Hossein Zamani said in February.

With Iran under sanctions, Saudi Arabia raised its output to an all-time high of more than 10.5 million barrels a day as did other producers, leading to an oversupply which has caused prices to nosedive around 70% since mid-2014.

Bin Salman’s remarks on Friday left the outcome of a meeting between OPEC and other big oil producers in Doha this month in question and sent prices sharply down.

In London and New York, oil prices sank more than four percent after the comments. Brent crude fell as much as $1.78 to $38.55 a barrel and West Texas Intermediate dropped $1.62 to $36.72 a barrel.

Quoting materials from Iran Front Page is permitted only if the source is mentioned by name.

Iran Oil export reaches 7.1mn barrels of Oil only in 2 days.

Iran Oil export reaches 7.1mn barrels of oil only in 2 days. (IranFrontpage).

Iran has announced that it shipped more than seven million barrels of crude oil in only two days thus setting a new record in the country’s oil exports not seen in several years.

Pirouz Mousavi, the managing director of the Iranian Oil Terminals Company (IOTC), has been quoted by the media as saying that the exports of 7.1 million barrels of oil were made over the past few days through the southern Kharg terminal.

Mousavi said four million barrels were shipped to Europe and the remaining 3.1 million barrels were shipped to Iran’s traditional clients.

The official further added that Iran’s oil export terminals can simultaneously host 9 tankers for loading crude oil.

Mousavi further emphasized that with the arrival of new tankers within the next few days a new phase in the rise of Iran’s oil exports to Europe will take place.

He also said that based on an authorization that has been issued by the National Iranian Oil Company (NIOC), Iran’s oil exports are expected to rise by above 500,000 barrels per day (bpd) within a month.

The NIOTC chief said the National Iranian Tanker Company (NITC) is taking measures to resolve problems over providing the insurance for Iran’s oil shipments to Europe.  Once those problems are resolved, Iran will use NITC tankers for exports to Europe.

NITC is a subsidiary of NIOC and transports Iranian crude to export markets. The company has a fleet of 60 VLCC supertankers with a total transport capacity of 100 million tons and is considered as the biggest tanker company in the Middle East and 4th in the world.  It is currently a main target in the long list of economic sanctions against Iran.  Hmmm....As i said the Iranians are used to hardship they'll keep pumping.

Quoting materials from Iran Front Page is permitted only if the source is mentioned by name.

Saudi Arabia ready to tolerate low oil prices to $ 10 a barrel for sake of market share.

Saudi Arabia ready to tolerate low oil prices to $ 10 a barrel for sake of market share. (Taz).

Saudi Arabia is ready to tolerate the low oil prices to preserve its market share and displace the US from the market, Talgat Mamyrayymov, the former head of the Real politik analytical service, independent political analyst from Kazakhstan, told Trend.

He said that oil prices are falling for objective reasons.

"First, Iran will soon enter the market,” he said. “Second, Saudi Arabia said that it is ready to tolerate a price of $10 per barrel. Saudi Arabia seeks to find its niche on the market and press the US shale oil suppliers."

He said that oil prices continue falling and can reach up to $10-15 per barrel, adding that big oil players intend to leave the oil business and count on alternative energy sources.

"Thus, the games on the stock markets will not be in favor of the oil market because the major Western capital is beginning to leave it," he said.

According to the forecasts of the US Energy Information Administration (EIA), the average price of North Sea Brent oil will reach $40 per barrel in 2016 and $50 per barrel - in 2017. The EIA forecasts the average price on the US WTI oil at $38.54 per barrel in 2016 and $47 per barrel - in 2017. Hmmm......What will happen to those countries selling low quality crude Oil?

OPEC waiting for US oil companies’ bankruptcy, then cut production and raise prices.

OPEC waiting for US oil companies’ bankruptcy, then cut production and raise prices. (Taz).

OPEC will cut crude production and export in order to raise oil prices, after the US companies extracting hydrocarbons go bankrupt due to the current low energy prices, said Alexander Razuvayev, economist and director of the analytical department at Russian company Alpari.

Alpari is one of the leading companies offering forex trading in Russia.

"The price war will end sooner or later,” he told Trend Jan. 11. “We can expect positive changes this year. As a result of falling oil prices, budgets are running out, shale companies go bankrupt. Those, who survive the crisis, will take the new position on the market at comfortable prices."

He said that none of the largest oil producers will be able to work at current low prices for a long time.

Razuvayev believes that the current conflict between Saudi Arabia and Iran is unlikely to impact the world oil prices.

“There won’t be a massive clash between the parties,” Razuvayev said. “Iran has just been released from the sanctions. Saudi Arabia is weaker than Iran militarily. The sides do not need a war." Read the full story here.

Related:   Shale Producer Gets $1.4 billion Wall St. Help in Re-Arming for OPEC War

Oil prices will rise in case of Riyadh-Tehran conflict turns into a military confrontation.

Oil prices could rise in case of Saudi Arabia-Iran hot conflict. (Taz).

Supplies continue to exceed demands on the world hydrocarbon market, Valentyn Zemlyansky, the director of energy programs at the Center of World Economy and International Relations of Ukraine’s National Academy of Sciences, told Trend Jan. 6.

“The oil price growth is not expected in the short term,” he said.

The expert said that the oil price can increase on the world market if Saudi Arabia-Iran conflict deteriorates.

He did not rule out the possibility that Riyadh-Tehran conflict can turn into a military confrontation.

"The world economy is in a serious crisis,” he said. “This is the first sign of a possible big conflict."

Iran produces 2.8 million barrels of oil per day and exports 1.1 million barrels of this volume per day.
Saudi Arabia produces more than 10 million barrels of oil daily and exports more than seven million barrels per day.

Relations between Saudi Arabia and Iran soured after execution of Nimr al-Nimr, a prominent Shia cleric, by the Kingdom along with other 46 people, which was followed by a strong protest from Iran.

Iranian Kharg Terminal is getting ready to receive big tankers, once the sanctions on Iran are lifted.
Right now nine tankers can simultaneously berth at Kharg Terminal, which is able to receive giant tankers with 360 barrels capacity, Qolamhossein Gerami, an official with Iran’s Oil Terminals Company said.

Referring to Kharg as the biggest oil terminal in Iran, he said the terminal is currently responsible for letting through 94 percent of Iran’s exported oil, Mehr news agency reported January 6.

Oil is pumped through five pipelines to the terminal and stored in reservoirs as big as one million barrels, he explained.

He said the terminal is able to store 28 million barrels of oil, both light and heavy.

At the eastern terminal, with a T pier, six tankers can birth at the same time and receive 67,500 barrels of oil per hour, the official further said.

The pier’s waterline is 21 meters and can serve tankers with capacities of 275 thousand metric tons, he noted.
According to the official, the western front can receive three tankers at a time and transfer 360 thousand barrels of oil in one hour.


The pier’s waterline is about 30 meters and is therefore able to serve the biggest tankers there is, he stated.

Any coordination within OPEC is highly unlikely amid the tensions between Iran and Saudi Arabia, Sam Barden, the director of Wimpole International, an energy market development company believes.

“OPEC has no future what so ever. It does not fit the notion of a modern economy, and given current tensions between Iran and Saudi Arabia the likely hope of any coordination is zero,” Barden told Trend.


Over the past few days, the relations between Iran and Saudi Arabia deteriorated following the kingdom’s execution of a prominent Shia cleric Nimr al-Nimr on Jan. 2.

And then there's this:

First of all, the prices may increase in reaction for the potential threat of failures in supply of raw materials via the Strait of Hormuz, which is of strategic importance to the world market, through which one-third of the world’s maritime oil supplies pass. The northern coast of the strait belongs to Iran, the southern – to the United Arab Emirates, which have lowered the rank of its embassy in Tehran as a result of the recent conflict.

For temporary diversification and security of oil supplies to the world market, Iran can potentially start transportation through Azerbaijan, which has an extensive network of oil pipelines. Technically, Iran can deliver its oil to Baku via the Caspian Sea or railway with a view to its subsequent export via the Baku-Tbilisi-Ceyhan (BTC) pipeline with access to the Mediterranean Sea. However, the economy of such deliveries should be seriously studied, especially against the background of low global oil prices.

Thus, on one hand, a mess in the OPEC may lead to uncontrolled oil supplies to the global market, which would reduce oil prices to historic lows, 

on the other hand - the deliberate blocking or, at least, a threat of restrictions in the Strait of Hormuz with the further development of the conflict may cause an increase in oil futures prices.

Related:

On average, the “all-in,” breakeven cost for U.S. hydraulic shale is $65 per barrel, according to a study by Rystad Energy and Morgan Stanley Commodity Research.

Global redistribution of oil market coming.

Global redistribution of oil market coming. (Taz). By Vagif Sharifov.

OPEC’s dumping oil prices, Saudi Arabia’s desire to constantly expand its market share, and expectations of coming of Iranian oil after removal of sanctions on Tehran, have forced the US to urgently take the historic decision to start exporting its own oil.

Experts have already reacted negatively to this news, saying that oil prices will fall significantly, at least, due to a psychological factor. However, the US itself doesn’t think so – the Department of Energy believes that by 2025 the price of Brent oil will reach $90.23 per barrel or only $0.18 per barrel less than if the export ban had been kept.

Greatest difficulties will be faced by the business in the domestic US market, where a limited supply of WTI will increase its value at oil refineries, leading to higher prices for gasoline, and dragging consumer price inflation in the economy. On the other hand, it will be easy for China, as it will be selling its consumer goods in the US for higher prices, while their prime costs being kept due to lack of a significant impact from WTI on the Brent oil price.

Meanwhile, Saudi Arabia - the main market player physically pressing the prices - is trying by all means to “pour” oil even to places where others have previously worked.

This, in turn, causes a conflict of interests with Russia, which, because of different prime costs, can’t afford such level of dumping in Europe, as Saudi Arabia does.

Apparently, this “overdumping” game will soon be joined by the US. By the way, the estimates presented by the US Department of Energy look at least strange against the backdrop of the fact that Iran expects the lifting of sanctions in Q1, 2016 in order to begin oil exports.

There is no doubt that Iran would offer its oil cheaper than the market price, pursuing the following objectives:

- to gain market share in the world as fast as possible;

- to fill its budget with money coming from oil exports as quickly as possible to use them for restoration of domestic market infrastructure, including the construction of new oil and gas pipelines.

The whole situation will lead to an unplanned meeting of OPEC in the first six months of 2016, where the countries will blame each other of deliberate glutting the market. But the decision will not be taken to cut the production because there will be the US oil on the market.

Any reduction in any direction will immediately lead to a decrease in a market share, despite the break-even point of the state budgets of Iran, Algeria, Iraq, Saudi Arabia and the UAE is rather less compared to the current oil price. Libya will be in the worst situation. Its state budget may be deficit-free only at the price of $207 per barrel.

The global redistribution of the oil market between Saudi Arabia and the US is obvious. OPEC ceased to be a locomotive. It became a purely commercial company making a profit regardless of anything. Many specialists believe that there is no need for the cartel any more.

Alberta’s Finance Minister once said that we need such a position when we would not listen to OPEC to decide how many schools we should build. If OPEC wanted, it could increase the prices, forgetting about the market share. It is always possible to restore as it was in 1973, when the cartel cut its production so that the price has risen from $3 to $12 per barrel.

'We don't need permission' Iran won't wait to increase its oil output.

'We don't need permission' Iran won't wait to increase its oil output. (Taz).

Iran does not need permission to increase its oil production after the sanctions against are lifted, the Islamic Republic’s Oil Minister Bijan Namdar Zanganeh said.

He made the remarks while commenting on its recent letter to the Organization of the Petroleum Exporting Countries (OPEC), in which he asked the cartel to reduce production by at least 1.3 million barrels per day (mbpd), the oil ministry’s SHANA news agency reported Dec. 2.

Ahead of the upcoming OPEC meeting which is scheduled for Dec. 4, Zanganeh wrote a letter to OPEC chief Abdallah Salem el-Badri, saying that the cartel members should be committed to the ceiling level, which had been set at 30 mb/d.

Zanganeh said that he did not write the letter to the OPEC for approval. He added that the letter was written to remind OPEC about the commitments regarding the ceiling level as well as explaining Iran’s position.

The Iranian minister further said it is not the first letter that was sent to the organization members. He underlined that Iran was forced to exit the oil market illegally under the sanctions, emphasizing that Tehran doesn’t need any permission to return.

Tehran hopes to increase its oil production by 500,000 barrels per day immediately after the international sanctions’ removal.

Iran’s current oil production is estimated to be around 2.8 million barrels per day of which about one million barrels are exported.

One of the biggest mysteries in the oil market surrounds just how much oil Iran is hoarding at sea.

Iran claims it's not stockpiling oil in tankers in the Persian Gulf, but no one believes it. Up until recently, energy experts thought Iran's vessels held 30 million to 40 million barrels of oil.

But maritime surveillance firm Windward has harnessed sophisticated technology to determine Iran is actually hoarding 50 million barrels of oil. That's up nearly 150% from April 2014 when Windward started tracking this closely-watched metric.

It's important to remember the oil hiding at sea is ready to be shipped to a buyer -- likely in Asia -- at a moment's notice. It's already been pumped out of the ground, cleaned up and processed.

"Iran has been trying to downplay what they have in floating storage because they don't want those figures to spook the market," said Tamar Essner, an energy analyst at Nasdaq Advisory Services.

Platts said Iran is storing as many as 53 million barrels of oil and condensate at sea, up from a previous estimate of 40 million to 42 million.

"There's no real clarity in international oil data. It's got the precision of cutting your hair with a chain saw," said Kloza. Hmmm......We are heading to very interesting times. Fasten your seat belts.

Iranian Oil Minister urges OPEC to cut output.

Iranian Oil Minister urges OPEC to cut output. (Taz).

Iranian Oil Minister Bijan Namdar Zanganeh has asked the Organization of the Petroleum Exporting Countries (OPEC) to reduce production by at least 1.3 million barrels per day (mbpd).

Ahead of the upcoming OPEC meeting, Zanganeh has written a letter to OPEC chief Abdallah Salem el-Badri, announcing that the cartel members should be committed to the ceiling level, which had been set at 30 mb/d, Mehdi Asali, an Iranian oil ministry official said, Mehr news agency reported Dec. 1.


It is time for certain OPEC members to cut their output, ahead of lifting sanctions against Iran, said Zanganeh's letter.

Asali, who is Iranian oil ministry’s secretary for OPEC affairs and relations with energy organizations, said that the Iranian minister has informed the organization that Iran will revive its pre-sanction output and the OPEC members should open space for the Islamic Republic’s output.

Iran’s crude output and export was decreased by 4.2 mbpd and 2.6 mbpd as a result of the sanctions, the official said, adding Tehran will return to former output level as soon as sanctions are removed.

The OPEC members' total crude oil output has dropped by some 256,500 barrels per day to 31.382 mbpd in October compared to September, the organization said in its latest monthly report.

Iran increased crude oil production (excluding condensates) by 4,700 barrels per day in October, compared with the previous month. The country's oil output reached 2.874 mb/d per day.

Iran’s oil output was about 3.7 mb/d in 2011, Hmmmm........Drop it or else.......? Read the full story here.

Iran intends to produce more oil but asks OPEC to stay within quota.

Iran intends to produce more oil but asks OPEC to stay within quota. (Taz).

Tehran has asked the 12-nation OPEC cartel of oil producers to cut its total oil production to stay within the daily quota, Iran's Oil Minister Bijan Zangeneh said Saturday, Press TV reported.

"The OPEC is extracting [more oil] than the allowed quota. I asked them to cut oil output to meet the quota. But it does not mean that we will not be producing more oil because it is our right to come back to the market," Zangeneh has been quoted as saying by Sputnik news agency.

The current OPEC quota stands at 30 million barrels of crude a day. Iran said earlier today it planned to boost oil production by 1 million barrels a day within the next 5-6 months.

"I do not expect a new agreement [on the quota] to be made on December 4," he added.

OPEC member countries are due to meet on 4 December to assess the bloc’s production policy and the global oil market, months after their June decision not to cut oil production despite a slump in global oil prices.

Iran’s oil minister stressed that Iranians "do not need a permission to restore our oil production levels" as seen prior to the 2012 sanctions.

Zangeneh said in early September: “Immediately after lifting sanctions, it’s our right to return to the level of production we historically had,” adding, “We have no other choice.”

He noted that the country will raise its output by 500,000 barrels per day soon after sanctions are lifted and by one million barrels per day within the following five months. Hmmmm......Sounds like interesting times are ahead of us.

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