EMEA News
"An Output Ceiling has No Benefit to Us," Says Iran's Oil Minister, Calling For Massive Production Quota Instead
Although he claimed he received no signals from other members that they plan to increase oil production output, Bijan Zanganeh, oil minister for Iran, said during the Organization of the Petroleum Exporting Countries' (OPEC) Vienna meeting Thursday that Tehran does not support an output ceiling and wants a massive production quota instead.
Zanganeh explained to reporters, "Without country quotas, OPEC cannot control anything"; he added that he was happy with the OPEC summit.
In fact, an output freeze wasn't on the agenda at all, despite rumours to the contrary earlier this week and that Saudi Arabia may even be inclined to debate the merits of a renewed output coordination: "It seems that the members believe that it should manage the market without discussing about the freeze; because a freeze, I think is a matter of history," said Zanganeh.
If the Iranians had their way, they would receive a quota of 4.7 million barrels per day, (bpd) well above its current output of 3.8 million bpd and representing 14.5 percent of OPEC's 32.5 million bpd output.
Iran's position at the table drew mixed responses, with Kuwait and Qatar reportedly leaning towards the need for an output ceiling, and Venezuela and Algeria backing the Islamic republic by stating that an output ceiling must be accompanied by a country-specific quota system.
Euologio del Pino, oil minister for Venezuela, told the press that OPEC should be able to "adjust to the recovery of production of countries like Iran" and that "we're also looking at some new ideas: the possibility to have a supply-production range per country."
As for the much-maligned OPEC, Mohammed bin Saleh al-Sada, energy minister for Qatar, called the cartel a "very valuable organization and we are all behind it."
To which outgoing secretary-general Abdullah al-Badri added, "Don't take that notion that OPEC is dead: OPEC is alive."
As hard-lined as Zanganeh may have been at the summit, his position comes as no surprise: in an internal OPEC report seen by Reuters prior to the December 2015 OPEC ministerial meeting, both Iran and Algeria called for a return of the group's quota system, which was dropped in 2011.
Specifically, Iran wrote that OPEC's then-30 million barrels per day ceiling, which doesn't specify quotas for individual members, "has not effectively contributed to oil market stability"; it called for a ceiling to be set for 6 or 12 month intervals proportionate to the estimated `call on OPEC', and then allocation of production for every member country could be agreed upon."
