Oil and Gas

Iran oil min says limiting Iran's production is out of question

Iran says it can't curb oil production

Iran on Thursday dismissed any chance of cutting a deal with OPEC and non-OPEC members, saying it would not curb a rise in its output once Western sanctions on the country are lifted next year.

The comments from Iranian oil minister Bijan Zangeneh come as OPEC is meeting on Friday in Vienna amid predictions of another year of painfully low prices because of a worsening global glut.

"We do not accept any discussion about increases of Iran production after the lifting of sanctions. It is our right and anyone cannot limit us to do it. We will not accept anything in this regard," Zangeneh told reporters.

An oil tanker is seen off the port of Bandar Abbas, southern Iran.
Lots of words, but no OPEC action even as oil soars

"And we do not expect our colleagues in OPEC to put pressure on us... It is not acceptable, it's not fair," he said, adding that Iran would raise production by up to 1 million barrels per day following years of forced curbs because of Western sanctions on the Islamic Republic over its atomic program.

Zangeneh added that OPEC members have lost so much money with the fall in price and said it seemed that the situation cannot be changed in then near term, according to Reuters.

The comments followed a report in industry publication Energy Intelligence saying Iran's arch-rival Saudi Arabia might propose a global deal to rebalance oil markets, including asking OPEC members Iran and Iraq to limit output growth.

The newsletter cited a senior OPEC delegate as saying Saudi Arabia will call for a 1 million barrels per day (bpd) output cut next year by OPEC, but only if other members and non-members like Russia, Mexico, Oman and Kazakhstan commit to joint action.

OPEC headquarters in Vienna, Austria.
Patti Domm | CNBC

Last time OPEC and non-OPEC joined forces to tackle low oil prices was 15 years ago, soon after the 1998 Asian financial crisis. Since then top non-OPEC producer Russia has repeatedly resisted calls for joint action and has instead grown its output by 70 percent.

"It is very difficult to cut one million bpd collectively. The Saudis do not want to change their previous talk. No cut without cooperation," a Gulf OPEC source told Reuters.

Oil prices edged up, though traders remained cautious.

"The market will want to hear from other parties and to have greater assurance that it looked a possibility. Not only that they (the other producers) agree to do it but also that they stick by the agreement," said Ric Spooner, chief analyst at CMC Markets in Sydney.

"The fact that Saudi Arabia has put out a proposal certainly gives it a bit more significance."

Benchmark crude futures moved away from near 2015 lows, with internationally traded Brent up 54 cents by 0815 GMT at $43.03 per barrel and U.S. crude up 38 cents at $40.32.

Saudi Arabian Oil Minister Ali al-Naimi
OPEC: Are we going to see a Saudi change of heart?