Iran: Oil Market Satiated

A01027486.jpgTEHRAN (FNA)- Iran’s Oil Minister Gholam Hossein Nozari said on Wednesday the oil market was well supplied and other reasons including the United States’ economic problems were behind rising crude prices.

“Evidence shows that the market is well supplied. The price hike is because of other factors, including America’s economic problems,” Nozari said.

Oil fell by more than $2 a barrel on Wednesday, extending the previous day’s slide after a strong bull run that saw an all-time record high $135.09 last week.

Large consumer countries, such as the United States, have pressed OPEC to raise output to help tame prices. Washington says price increases are due to a tight supply but OPEC has largely resisted the calls for a hike.

Blaming record prices on factors such as geopolitical tensions, speculation and the weak dollar – and not on output levels – OPEC has pledged it would act to boost supply if it were to see any shortages in the market.

Abdallah Salem El-Badri, secretary general of OPEC – the cartel of 13 countries which produces 40 per cent of the world’s oil – has recently stressed, “There is clearly no shortage of oil in the market.”

OPEC’s current output is around 32 million barrels per day, compared with global production of 85 million barrels. El-Badri also underscored OPEC’s view that price volatility has been driven by speculation by hedge funds.

Record-breaking oil prices have sparked widespread international concern among consumer nations.

But Iran’s OPEC Governor Hossein Kazempour Ardabili said at the 11th International Energy Forum (IEF) in Rome in April that pressures on producer countries to raise oil output are politically driven.

“Oil spikes have nothing to do with demand and supply. The world’s oil reserves are at their highest level and there is enough energy in the market,” Kazempour Ardabili said.

The Iranian official blamed stock market slumps in the developed countries, including the United States and the continued depreciation of the US dollar, coupled with low interest rates, for the soaring oil prices.

His remarks came after earlier comments by many world analysts and OPEC officials, including Iran’s oil minister Gholam Hossein Nozari, that members of the oil cartel had no role in oil spikes since the high prices are a function of factors other than demand and supply.

Market analysts, specially those from consumer nations, take Bush administration responsible for the price hikes caused by Iran concerns, saying that it is the “rumors of US action against Iran circulating in the markets” that affected oil and the dollar.

The United States and its Western allies accuse Iran of trying to develop nuclear weapons under the cover of a civilian nuclear program, while they have never presented any corroborative evidence to substantiate their allegations. Iran has denied the charges and insisted that its nuclear program is for peaceful purposes only.

Tehran stresses that the country has always pursued a civilian path to provide power to the growing number of Iranian population, whose fossil fuel would eventually run dry.

Iran is under three rounds of UN Security Council sanctions for turning down West’s illegitimate calls to give up its right of uranium enrichment, saying the demand is politically tainted and illogical.

Iran has so far ruled out halting or limiting its nuclear work in exchange for trade and other incentives, and says it will only negotiate with the UN nuclear watchdog.

Tehran has repeatedly said that it considers its nuclear case closed after it answered the UN agency’s questions about the history of its nuclear program.

Meantime, Tehran has announced that it has its own package of proposals which includes solution to many world problems, including Tehran’s nuclear standoff with the West.

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