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While OPEC+ had agreed to cut oil production to keep market balance and is now easing the cut in a phased manner, Iran is exempt from making cuts until it reaches December 2016 production level – namely near 4 million barrels per day, as confirmed by Iranian officials and OPEC+ fellows.
The Tehran-based Persian language newspaper “Iran” cited source in the country saying that Iran won’t enter any production cut deal with OPEC fellows until its production reaches pre-sanctions level.
Organization of Petroleum Exporting Countries (OPEC) and non-OPEC oil exporting states convened a meeting on Thursday and agreed on maintaining production level in March and ease output cut deal previously agreed upon in a phased manner during next 3 months.
According to the agreement, OPEC+ members would increase production by 350,000 barrels per day in May, 350,000 bpd in June and 400,000 bpd in July.
Saudi Arabia which cut its production voluntarily by 1,000,000 bpd per day has announced that it is going to ease the reduction in next three months by 250,000 bpd, 350,000 bpd and 400,000 bpd until it reaches pre-cut level by July.
The agreement was welcome by the market as oil price reached 65 dollars a barrel, after it had fallen to below 64 since a slow recovery in demand and Iran’s reportedly rising exports.
Reuters has previously reported that Iran’s oil exports to China set a record this month reaching pre-sanctions level. The report claimed that China imported 1,000,000 barrels of Iranian oil in March, despite admitting that there was no definitive figure for the exports.
Iran newspaper cited sources within Iran saying that Reuter’s reports of Iran’s oil export were not always correct and credible.
However, the sources confirmed that Iran was exempt from OPEC+ production cut deal until its output reaches levels before the United States imposed sanctions on Iran’s oil exports.
They also said that those members of OPEC which increased their petroleum production in absence of Iran must prepare room for Iran’s comeback.
Saudi Arabia’s Energy Minister, Prince Abdulaziz bin Salman, said in the sidelines of OPEC’s Thursday meeting that Iran would be exempt from OPEC+ production cut until its output reaches December 2016 level.
This means that Iran doesn’t need to cut output until its production reaches over 3.72 million bpd and near 4 million bpd.
Iran’s Oil Minister Bijan Zanganeh said after the meeting that Iran, Libya and Venezuela are currently pumping under their traditional production level because of US sanctions pressure and they have to resume output to their historical right.
