TEHRAN (FNA)- Iran’s Oil Minister Gholam Hossein Nozari said that the Organization of Petroleum Exporting Countries is likely to hold an emergency meeting before December.
“OPEC will probably call an emergency meeting before the scheduled December gathering if the trend of falling global oil prices continues,” Nozari told reporters.
If OPEC had not decided to curb the output by 1.5 bpd, undoubtedly the prices would have dropped even more, Nozari added.
The Organization of Petroleum Exporting Countries (OPEC) agreed in October to cut their output by 1.5 million barrels per day, after oil prices halved from a record high of 147 dollars in July. Yet, the move could not curb the dropping prices and the market is yet struggling with downward trend.
Meantime, Iran’s OPEC Governor Mohammad Ali Khatibi said on Sunday that the oil cartel will cut oil output again if the trend towards lower prices and slowing demand growth are unchanged when the group meets in December.
The credit crisis and economic slowdown could shave as much as 3 million barrels per day (bpd) from global crude demand, Khatibi said.
“If everything is the same and the trends continue like this then OPEC will have to do something,” he added.
“We have to balance the market. Recent indications are that demand could have fallen by 2 to 3 million barrels per day. Stocks are rising.”
Oil dipped below $60 a barrel last week, the lowest since March 2007, and has tumbled nearly 60 percent from its July peak over $147.
The Organization of the Petroleum Exporting Countries (OPEC) agreed at an emergency meeting on Oct. 24 to chop production by 1.5 million bpd, or around 5 percent, to halt the price slide, but the cut has had little effect to date.
OPEC President Chakib Khelil said on Saturday the producer group would probably move to cut again at its December meeting if prices stayed low and members had fully met their existing pledges to reduce supply.
Some members of OPEC would propose at the December meeting that the group look to maintain prices within a $20 range, Khatibi said.
That range could be either $70 to $90 per barrel or $80 to $100 per barrel, he added, declining to name the countries that would propose or support the price band or to say if Iran would support it.
Venezuela’s oil minister said last month it would propose OPEC adopt one of those two price bands. Venezuela has already proposed a further cut of another 1 million bpd in OPEC supply at the December meeting.
Current prices were too low to encourage investment in unconventional oil projects such as oil sands and in expensive conventional oil projects in the deep sea, Khatibi said.
“In the short-term the crisis is affecting demand,” Khatibi said. “But in the medium term this will affect supply. We need a price that will ensure we build capacity today to meet tomorrow’s demand.”
Iran’s plans to expand output were unaffected as it had neither deep sea nor unconventional projects, he said. “But if this continues, it will affect all producers, and Iran will be no exception”.
Oil companies are already reconsidering some projects that looked profitable when oil was higher.
Iran, the world’s fourth-largest oil producer, has cut around 200,000 bpd from output of around 4.04 million bpd in line with OPEC’s October agreement, a National Iranian Oil Company (NIOC) official said on Friday