Royal Dutch Shell Plc  .com Rotating Header Image

Iran to Raise Oil Output ‘at Any Cost’ to Defend Market Share

Screen Shot 2015-08-23 at 23.26.38

Screen Shot 2015-08-04 at 22.49.59U.S. benchmark West Texas Intermediate crude fell to less than $40 a barrel for the first time in more than six years in New York trading on Friday.

Anthony Dipaola and Hashem Kalantari: BLOOMBERG.COM: 23 AUGUST 2015

Iran plans to raise oil production “at any cost” to defend the country’s market share and joins calls for an emergency OPEC meeting to help shore up crude prices.

“We will be raising our oil production at any cost and we have no other alternative,” said Oil Minister Bijan Namdar Zanganeh, according to his ministry’s news website Shana. “If Iran’s oil production hike is not done promptly, we will be losing our market share permanently.”

Iran had the second-biggest output in the Organization of Petroleum Exporting Countries before U.S.-led sanctions banning the purchase, transport, finance and insuring of its crude began July 2012. Oil producers such as BP Plc and Royal Dutch Shell Plc have expressed interest in developing its reserves, the world’s fourth-biggest, once sanctions are removed.

Zanganeh was speaking during the first visit by a British foreign secretary to Iran since 2003. Philip Hammond was accompanied by officials from Shell and BP during his visit to reopen the U.K. embassy, four years after it was shut down following a mob attack, marking the improvement in relations since July’s nuclear accord.

Shell will pay a debt of $2.3 billion that the company wasn’t able to pay Iran for because of the sanctions “immediately” after the restrictions are lifted, Zanganeh said. BP was one of the “good customers” of Iran’s crude before the sanctions and is also expected to take measures to buy Iranian oil in t he future, he said, according to Shana.

Iran backed calls for an emergency OPEC meeting to be held earlier than the oil producing group’s next session on Dec. 4.

“Iran endorses an emergency OPEC meeting and would not disagree with it,” Zanganeh said. A meeting would “be effective” in halting oil’s decline, he said.

Crude Glut

OPEC is pumping at near record levels, even amid a global glut of crude. Algeria wrote to others in the 12-member group saying they should consider measures for reviving oil prices and stabilizing the market, two delegates familiar with the request said last week.

Algeria’s initiative to coordinate an OPEC response to tumbling crude prices had the backing of cash-strapped fellow members Libya and Venezuela. It was met with no public response from OPEC’s top producer Saudi Arabia, which has led the group’s decision to maintain its crude output target unchanged at 30 million barrels a day to preserve market share amid rising production from the U.S. to Russia.

OPEC pumped 32.1 million barrels a day of crude in July. Saudi Arabia is set to continue pumping near current levels of about 10 million barrels a day this year and next, Barclays Plc analysts including Miswin Mahesh wrote in a report Aug. 21.

Zanganeh has said that other OPEC members should make room for Iran when it raises output after sanctions are lifted as a result of last month’s nuclear pact with world powers. Iran pumped 2.85 million barrels a day in July, down from 3.6 million at the end of 2011, data compiled by Bloomberg show.

U.S. benchmark West Texas Intermediate crude fell to less than $40 a barrel for the first time in more than six years in New York trading on Friday. The global glut and increased concern that weakening Chinese growth may mean less oil demand has dragged down Brent crude, the global benchmark, by about 21 percent this year.

SOURCE and its sister non-profit websites,,,,,, and are owned by John Donovan. There is also a Wikipedia feature.

0 Comments on “Iran to Raise Oil Output ‘at Any Cost’ to Defend Market Share”

Leave a Comment

%d bloggers like this: