Iran warns Opec it plans to recapture market share
Iran’s oil minister warned fellow Opec members that it aims to recapture market share and plans to step up oil output by 1 million barrels per day “within months” of sanctions being lifted, Iran state news organisations reported yesterday.
The Iranian oil minister Bijan Zanganeh was repeating the bullish output assessment he has been making for months. In June, for example, he said that Iran could increase production by 1 million bpd within seven months of sanctions being lifted, bringing it back to its 2011 pre-sanctions level of 3.7 million bpd.
But the comments seemed to be aimed mainly at fellow members of Opec – especially its de facto leader, Saudi Arabia – warning that in the current weak oil price environment the organisation will have to make room for Iran’s increased output.
The state news agency Irna reported Mr Zanganeh’s output forecast, and that “the minister added that Tehran has informed Opec about its determination to regain its lost market share”.
The showdown between Iran and Saudi Arabia within Opec may not be inevitable, however, as many analysts say the minister’s output forecast is too optimistic.
Wood Mackenzie, for example, expects that Iran could be pumping an additional 400,000 bpd by this time next year, with another 200,000 bpd coming on in 2017.
Follow The National’s Business section on Twitter
Updated: August 2, 2015 04:00 AM