Iran’s return to the oil market would not cause the oil price to fall, according to a senior Iranian official.
The country’s national news agency, IRNA, quoted Iran’s national representative to OPEC, Mehdi Assali as saying: “Iran’s return to the market after the removal of sanctions will not cause a price decline, but the countries that have taken over Iran’s [share of the] market should cut their production in favour of a market equilibrium.”
He said Iran had made the case in a letter to the Organization of the Petroleum Exporting Countries.
Assali was positive about Friday’s ministerial meeting of the 12-member oil producer group.
He said Iran is currently exporting 1 mb/d of oil, which could increase by 500,000 b/d shortly after sanctions are lifted.
“In case the countries that have occupied Iran’s share in the market refuse to cut their production, Iran’s return to the market is likely to make prices fall and those countries would suffer because Iran’s exports will double and even if the prices are cut by half there would no financial loss for Iran,” said Assali.
“But the countries whose exports are high and have taken Iran’s share will suffer losses if oil prices fall. Since they cannot tolerate such conditions they will have to cut their production,” he added.
