Iran’s OPEC governor announced on Saturday that if oil prices continue their downward trend under the shadow of the global economic crisis, OPEC may react by cutting its production, according to Iran’s state-backed Mehr news agency.
However, Mohammad Ali Khatibi told Mehr, “seasonal demand for oil will grow in the near future, which can trigger the oil prices up.”
Khatibi predicted if the current economic crisis continues in the major oil consuming countries, especially in Europe, it’s probable that oil prices fall more. In these circumstances Khatbi may attempt to convene an emergency OPEC meeting with a view to cutting production.
Khatibi has criticized Saudi Arabia – the only producer in OPEC with a meaningful amount of spare capacity – for unilaterally increasing its oil output without formal OPEC approval following the failed OPEC meeting on 8 June.
The Iranian Oil Ministry has been growing more bullish since the Iranian President Mahmoud Ahmadinejad appoint ex-Revolutionary Guards chief Rostum Qasemi to Oil Minister.
Qasemi has threatened to pull contracts from companies felt to be underperforming on production, after the disclosure that Iran is losing oil production by almost per day, threatening its status as a net oil exporter. Analysts peg the natural rate of decline in Iran’s crude oil production at between eight and eleven percent a year.
Earlier this month Qasemi said that the Guard’s engineering wing that he used to run, Khatam al-Anbia, should take over the running of the country’s hydrocarbons resources and no foreign contractors were needed.
The Oil Ministry declared in October 2010 that Iran’s reserves had risen to 150.31 billion barrels from 138 billion.
The next OPEC meeting will be held on 14 December in Vienna.
