EMEA News
Iran Prepared for "Worst Case" Low Oil Price Scenario, "Absolutely No Chance" it will Delay Oil Production Plans
Iran's deputy oil minister for international affairs Amir Hossein Zamaninia says that there is "absolutely no chance" his country will delay increasing its oil shipments, irrespective of how low oil prices fall, Bloomberg reports.
In anticipating that international sanctions against Iran will be lifted in January, Zamaninia says his country has already secured customers for its increased output and will offer oil and natural gas contracts to investors.
"Our general assumption is on a market with low prices, so the price can drop as low as possible as we are prepared for the worst scenario," he said during an interview in Tehran.
Crude futures have continued to fall since the Organization of Petroleum Exporting Countries (OPEC) failed to agree a production ceiling at its latest December 4 meeting, with Brent dropping from $43 per barrel to under $38 since then.
"Gloom nourishes gloom," said Eugen Weinberg, head of commodities research at Commerzbank AG in Frankfurt.
"The market is fully acknowledging that OPEC is no longer in price-control mode or providing a floor, and that the group is unlikely to change that strategy any time soon."
Failure to change strategy, as both Goldman Sachs and Venezuela have warned, could see oil fall to $20 per barrel.
"While the market is oversupplied, as it should for much of 2016, there is no intrinsic value for oil," said Morgan Stanley analyst Adam Longson.
Yesterday Ship & Bunker reported that the International Energy Agency (IEA) in its latest Oil Market Report for December, predicted 2016's growth in world oil demand will be 1.2 million barrels per day (bpd), which it characterized as the "first signs of a slowdown."
