Iran sees Opec lack of member quotas as contributing to glut

[DUBAI] The lack of production quotas for individual Opec members means none can be held accountable if they pump too much crude, according to Iran's Oil Minister Bijan Namdar Zanganeh.

"You cannot hold any country responsible for how much they produce," Zanganeh said in an interview in Assaluyeh, Iran, where he inaugurated parts of the South Pars natural gas project. The Organization of Petroleum Exporting Countries hasn't published formal country production quotas for seven years.

Brent crude prices dropped for a third year in 2015 and have tumbled another 12 per cent this year. Opec, which supplies about 40 per cent of the world's oil, effectively abandoned output limits in December, potentially worsening a glut created after producers from the US to Russia and Saudi Arabia pumped more than demand warranted.

Iran is preparing to boost production and exports as it nears the end of sanctions that crippled its economy and choked off oil sales. Sanctions will end "in a few days" and the coming year will be one of "economic revival," President Hassan Rouhani said Monday in a speech.

Zanganeh has said that Saudi Arabia and other Opec members that gained sales when Iranian exports were curtailed should cut production to make room for Iran's expected increase in output.

"What the ministers do in the organization mostly amounts to consultation" because decisions are made at higher political levels in some member countries, Zanganeh said in the interview.

The global oversupply is due to Opec's failure to reach consensus on production ceilings, he said in Assaluyeh, according to the Iranian oil ministry's news agency Shana.

Zanganeh and Rouhani attended the inauguration of phases 15 and 16 of the South Pars gas project Monday.

BLOOMBERG