Iran Cautions about Further Oil Price Falls

TEHRAN (FNA)- Iran’s oil minister said a continued fall in crude prices would harm producers, the Oil Ministry said on Saturday, three days before OPEC ministers are due to meet in Vienna.

Gholam Hossein Nozari also said Iran, the world’s fourth-largest oil exporter, wanted a “fair” crude price but did not elaborate. Earlier this week, he said $100 a barrel was the lowest appropriate price.

Crude has tumbled from a record $147 in July and was trading on Friday at below $107.

“If the reducing trend in prices continues like now … the producers will be harmed,” Nozari told Shana, making clear this was because production costs had not fallen.

Nozari, who will leave Tehran on Tuesday to attend 149th OPEC meeting in Vienna, pointed out that the costs of oil production have increased nearly 25-30 percent, while oil exporting countries face declining prices.

The Iranian oil minister said that if the current declining trend in oil prices continues it will paralyze some producers due to the high cost of maintaining oil production facilities.

The Organization of Petroleum Exporting Countries must deal with excess supply of oil at its next meeting, he stressed.

In the run-up to the Sept. 9 meeting of the Organization of the Petroleum Exporting Countries, Iranian oil officials have said OPEC members should cut output to their agreed targets so that oversupply on the market was reduced.

Iran’s OPEC Governor Mohammad Ali Khatibi also voiced concern about excess supply of oil in the market, and told Reuters this week that OPEC may need to cut oil supplies by as much as 1.5 million barrels per day, or nearly 5 percent, to balance global markets by early next year.

OPEC does not officially have quotas but the term is sometimes used to describe agreed output targets for each member country. Some, notably Saudi Arabia, have been producing above these targets.

In August, OPEC pumped almost 1 million barrels per day (bpd) more than its target of 29.67 million bpd, according to Petrologistics, a consultant that tracks OPEC supply.

As a result of the increase in OPEC oil production, particularly by Saudi Arabia, which has been under US pressure, and the decline in world demand, oil prices have dropped almost 28%.