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The Organization of Petroleum Exporting Countries (Opec) has no immediate plan to cut its output target for crude, and Iran is strong enough to withstand a deeper slump in prices even if the country must sell at $25 a barrel, Oil Minister Bijan Namdar Zanganeh said.
"If the oil prices drop to $25 a barrel, there will yet again be no threat posed to Iran's oil industry," Zanganeh said on Monday at a conference in here, according to the state-run Fars news agency.
Brent crude traded below $49 in London on Monday. Oil has fallen more than 30 per cent since Opec's decided on November 27 to keep its ceiling unchanged at 30 million barrels a day. Iran isn't seeking for Opec to hold an emergency meeting, Zanganeh said. The group is scheduled to meet next on June 5.
Iran, together with Venezuela, has called for Opec, which supplies about 40 per cent of the world's oil, to work together to support a recovery in crude. The US shale boom has contributed to a global glut, and Qatar and the United Arab Emirates estimate the oversupply at about two million barrels a day. Iran is hobbled by international sanctions over its nuclear programme and is struggling for market share.
Brent crude, a benchmark for more than half the world's oil, has slid 15 per cent this month and was 39 cents lower at $48.54 a barrel at 7:24 am London time on Tuesday. Oil down almost 50 per cent last year, the most since the 2008 financial crisis.
Market upheaval
Iran is consulting with fellow Opec members to respond to the collapse, Zanganeh said, without providing details.
Upheaval in oil markets is the result of politics and decisions by producer countries, Zanganeh said, declining to be specific.
Saudi Arabia's oil minister, Ali al-Naimi, said last month it was "irrelevant" whether crude fell as low as $20 a barrel, Middle East Economic Survey reported December 22. UAE Energy Minister Suhail Al-Mazrouei said in Abu Dhabi on Monday that sustainable development in the petroleum industry cannot be achieved at current prices.
Iran is lowering the crude price assumed for this year's budget to $40 a barrel, from $72, Fars reported Finance and Economy Minister Ali Tayebnia as saying January 15.
The Persian Gulf nation pumped 2.8 million barrels a day of oil in December, down from an average of 3.6 million in 2011, according to data compiled by Bloomberg.
Opec members and non-Opec producers must cooperate "to generate investment in the oil industry," Zanganeh said. "This will bring about desired conditions for both producers and consumers."
