A suitable price for crude is $60 to $65 a barrel, says Iran's oil minister

Iran, faced with a possible restoration of US sanctions, came out against higher oil prices, signalling a split with fellow OPEC member Saudi Arabia, which is showing a willingness to keep tightening crude markets.

A “suitable price” for crude is $60 to $65 a barrel, Amir Hossein Zamaninia, deputy oil minister for international and commercial affairs, said in an interview Sunday in Tehran. Oil Minister Bijan Namdar Zanganeh said earlier in the day that Iran supports “reasonable” oil prices and is not an advocate of costlier crude. Brent crude futures surged to almost $75 a barrel on Friday as traders braced for the possible re-imposition of US restrictions on Iran, the third-biggest producer in the Organization of Petroleum Exporting Countries (OPEC). 

Saudi Arabia, the world’s largest oil exporter and OPEC’s biggest producer, is said to want crude closer to $80 a barrel, in part to support the valuation of state energy giant Aramco before a planned initial public offering. OPEC ministers are to meet next month in Vienna. Together with allied producers, the group began reducing oil production last year in a drive to clear a global glut.  The curbs have all but eliminated surplus oil inventories, and prices are near a three-year high. Even so, Saudi Arabia is urging fellow producers to keep curtailing output. The constant fluctuation in oil prices is destabilising for future investment and security of supply, Zanganeh said.

He made no mention of the multiparty nuclear accord that eased sanctions on Iran starting in January 2016, but he warned that the insertion of politics into the energy market will hurt producers and consumers alike.

“We strongly believe the oil market should not be political,” he said.

Renewed US sanctions on Iran may disrupt more than the Persian Gulf nation’s oil exports. Iran holds the largest proven reserves of natural gas, and its gas and petrochemical industries have continued to grow since sanctions curbs were eased more than two years ago.