Published: Tue, July 02, 2019
Markets | By Erika Turner

Zanganeh on Mission to Protect Iran’s Share of Global Oil Market

Zanganeh on Mission to Protect Iran’s Share of Global Oil Market

OPEC and its allies are expected to extend oil supply cuts at least until the end of 2019 as Iran also joined top producers Saudi Arabia, Iraq and Russian Federation in endorsing a policy aimed at propping up the price of crude amid a weakening global economy.

Asked about a deeper cut, he said: "I don't think the market needs that".

This past Saturday at the G-20 meeting in Osaka, Russian President Vladimir Putin announced that Russia and Saudi Arabia had struck a deal to maintain their current output cuts at least until the end of this year and perhaps through the first quarter of next year.

Khaled Al Falih talks to the press on the sidelines of the 176th meeting of OPEC on Monday in Vienna, Austria.

"I have no problem with a production cut ..."

Riyadh contributed most to the cuts of 1.2 million barrels per day stipulated by OPEC+ deal.

The group meanwhile remains on red alert over escalating US-Iran tensions that have also fuelled strong oil-price gains, particularly over disputed attacks on tankers in the Straits of Hormuz. That reflects a somber outlook for oil supply and demand next year due to a combination of a slowing global economy and rising US shale output. "The prize of this sacrifice is there for everyone to see - the two main crude oil futures contracts are up more than $1.50 a barrel this morning", PVM analyst Tamas Varga said.

Saudi Arabia and Russian Federation ended years of animosity in 2016 to join forces to manage the global oil market in an effort to prop up prices.

Trump willing to meet N. Korea leader Kim at DMZ
In November 2017, Trump again tried to make a surprise visit to the DMZ but was forced to abandon his plans due to bad weather. Trump will visit South Korea from June 29-30 as diplomatic activities are going on regarding North Korea's de-nuclearization.

The United States is not a member of OPEC, nor is it participating in the supply pact. Brent crude futures were increased by more than 2.2 percent to $66.22 per barrel.

Opec and its oil-producing allies shifted on Monday towards extending their daily output caps, sending oil prices racing higher before the outcome of the group's official gathering. "Against the background of constant sanctions pressure from the West, Iran has to negotiate with the other parties to the deal to soften the sanctions against its economy", Ilham Shaban said.

OPEC member states pledged to cut production by 800,000 barrels per day, while non-OPEC countries agreed to reduce it by 400,000 barrels per day.

Saudi Arabia argues that oil supplies are sufficient, pointing to rising stockpiles despite significant output reduction in sanctions-hit Iran and Venezuela, both members of Opec.

Ministers meeting in Vienna agreed to prolong supply curbs by a further nine months, delegates said, asking not to be named because the talks were ongoing.

In case the Islamic Republic joins the OPEC plan to extend the current output restrictions, its share will decrease and it will not be easily recoverable.

The news sent NY oil prices shooting above $60 per barrel on Monday for the first time since May, with sentiment also buoyed by rising global equities after Washington and Beijing agreed to restart trade talks. At the same time, American shale production has set fresh records, putting the US on the brink of becoming a net oil exporter.

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