Iran calls to slash oil output as Opec nurses price slump wounds
Iran’s oil minister Bijan Namdar Zanganeh has called on Opec to get crude prices back up to $70 a barrel
A brutal sell-off in oil prices should be met with large cuts to production, Iran’s oil minister has said, in an attempt to get values back up to at least $70 a barrel.
Bijan Namdar Zanganeh called on the Organisation of the Petroleum Exporting Countries (Opec) to drop production, warning that that “no-one is happy” with prices at their current levels.
"Opec should decide to manage the market by reducing the level of production," he said, until the price of a barrel of Brent crude enters a range of $70 to $80 a barrel.
Iran's oil minister Bijan Namdar Zanganeh
Crude prices took a further hit on Monday as signs that China’s economy was losing steam added to concerns that energy demand would slow.
The price of Brent slipped back below the $50 a barrel mark, well below half last year’s peak of $115. "No one is thinking about $100 a barrel," Mr Zanganeh said.
Thus far, the 12-strong Opec cartel has been willing not to give up on market share in response to sliding prices. The oil producing bloc has signed up to Saudi Arabia’s strategy, deciding to wait out the impact of booming US shale production.
Low prices have taken a toll on US producers. Oil rig numbers have been thinned, dropping to a five-year low of 595 last week. Non-Opec production will shrink by 130,000 barrels a day next year, Opec predicted in a recent report.
But the cash crunch has caused more pain than some Opec members are willing to stomach. Rafael Ramirez, Venezuela’s former oil minister, and now its UN ambassador, has called on the cartel to drop output. Algeria is also understood to have lobbied Opec members for measures to prop up crude prices.