Iran offers cautious support to oil freeze

Mohammed bin Salman is said to have been behind Riyadh’s decision to abandon the freeze plan five months ago
Mohammed bin Salman is said to have been behind Riyadh’s decision to abandon the freeze plan five months ago

Iran’s oil minister Bijan Zanganeh has offered cautious backing to plans to cap production at a meeting of major producers this month, saying he wanted to see prices between $50 and $60 a barrel. Following a meeting with Opec’s new secretary-general Mohammed Barkindo, who has been trying to gain support for the plan, Mr Zanganeh said Tehran backs any measure aimed at stabilising the oil market, according to comments carried by state TV.  “Iran wants a stable market and therefore any measure that helps the stabilisation of the oil market is supported by Iran,” said Mr Zanganeh. “We support oil prices between $50 and $60 per barrel.” His comments stopped short of confirming Iran would join the output freeze plan, but the conciliatory tone may boost hopes for an agreement in Algiers this month.

 

Mohammed Barkindo

Iran’s refusal to join a similar plan in April led Saudi Arabia, its chief regional rival, to scuttle the Doha-based talks. This time, however, Iran has agreed to attend the meeting, which is being held on the sidelines of the International Energy Forum on September 26-28.

On Monday, Saudi Arabia and non-Opec member Russia signed a pact to co-operate to stabilise markets, saying they could agree to freeze output in the future. Iran’s status remains a possible sticking point for Saudi Arabia, however.

Iran has long argued that it cannot cap production while its exports are recovering from years of western sanctions, which were only lifted in January. But its production has risen since April and it is now within touching distance of the approximately 4m barrel a day level most analysts think it is targeting in the short run.

Vladimir Putin, Russian president, on Monday said Iran should be given leeway given its lost exports under sanctions. Saudi Arabia’s oil minister, Khalid al Falih, indicated however he believed Iran’s production was already high enough.

The decision may come down to Saudi Arabia’s powerful deputy crown prince, Mohammed bin Salman, who is said to have been behind Riyadh’s decision to abandon the freeze plan five months ago.

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