You are here

Iran's ready to pump more as Opec faces 'prisoner's dilemma'

24_39625439 - 25_08_2016 - GABON-ECONOMY-OIL-ENERGY.jpg
As speculation swirls over whether oil producers will reach a deal to coordinate output and aid a recovery in prices, Iran says it's ready to pump more.

[SINGAPORE] As speculation swirls over whether oil producers will reach a deal to coordinate output and aid a recovery in prices, Iran says it's ready to pump more.

The Opec member can raise production to 4 million barrels a day in two to three months from the current daily level of about 3.8 million, Mohsen Ghamsari, director of international affairs at state-run National Iranian Oil Co, said in Singapore on Monday.

The company faces no technical or operational reasons to restrict or cut output, state news agency Mehr cited Managing Director Ali Kardor as saying.

The comments signal that any deal between oil producers in Algiers later this month may have to accommodate more supplies from Iran.

The Persian Gulf state is seeking to regain market share after the removal of international sanctions earlier this year, and its decision not to attend a gathering in Doha in April led to the collapse of a proposal to freeze output then.

Your feedback is important to us

Tell us what you think. Email us at

While Saudi Arabia and Russia on Sunday agreed to work together to ensure market stability, their leaders stopped short of offering detailed proposals.

"The Algiers summit may very well set the stage for the re- emergence of Opec's traditional Prisoner's Dilemma," said John Driscoll, the chief strategist at JTD Energy Services Pte, who has spent more than 30 years trading crude and petroleum in Singapore.

"A general consensus on output levels and higher prices might win nods and endorsements but securing full compliance with sacrifice of national self-interest from both Opec and non-Opec producers to achieve collective goals may prove more elusive."

Output Proposals Iranian Oil Minister Bijan Namdar Zanganeh will make the final decision on whether the country joins any plan by producers to freeze crude output, Mr Kardor said, according to Mehr.

Crude has gained more than 5 per cent since the Opec said in August that it will hold talks in Algiers later this month. Producers have been discussing proposals to limit output after a glut cut prices by more than half from two years earlier.

While Opec adopted a Saudi-led policy allowing members to raise output to protect market share from higher-cost producers in 2014, Iran's supplies were constrained until this year by international sanctions over its nuclear program.

Brent crude, the benchmark for more than half the world's oil, was 2.1 per cent higher at US$47.79 a barrel by 3.52pm Singapore time on the London-based ICE Futures Europe exchange. West Texas Intermediate, the US marker, was up 1.8 per cent at US$45.23 a barrel.

Iran will support any measures to revive prices "while preserving its national interests" to regain market share, Mehr news agency cited Deputy Oil Minister Amir Hossein Zamaninia as saying on Saturday.

The nation can raise its total oil output to 5 million barrels a day in two to three years, NIOC's Ghamsari said on Monday in Singapore.

"There's only a small chance that Iran will participate in an output freeze plan along with other producers including Saudi Arabia and Russia," Hong Sung Ki, a commodities analyst at Samsung Futures Inc, said by phone.

"If Saudi Arabia and Russia agree to freeze output, it will only be able to support prices from lower levels without Iran's participation. Saudi Arabia and Russia are making bold statements but it's getting quite old because they are only reiterating themselves to prevent a further drop in prices." 

Oil-market stability is impossible without Saudi-Russian cooperation, the kingdom's influential Deputy Crown Prince Mohammed bin Salman said after meeting on Sunday with President Vladimir Putin in Hangzhou, China. Mr Putin told Bloomberg in an interview last week that he'd like his nation and Opec to reach an output freeze, exempting Iran until it raises production to pre-sanctions levels.


BT is now on Telegram!

For daily updates on weekdays and specially selected content for the weekend. Subscribe to