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Expensive Oil not to Benefit OPEC Members in Mid-Term

Source: 2/28/2017, Location: Asia

Too expensive crude oil does increase revenues of the Organization of the Petroleum Exporting Countries (OPEC) but would ultimately damage their economies because the rivals will increase output at high oil prices, Iranian Minister of Petroleum Bijan Zangeneh said.

Speaking following a meeting with his Russian opposite number Alexander Novak in his Tehran office Tuesday evening, Zangeneh told reporters that the tendency of Russian companies to develop oilfields in Iran and signature of deals in the framework of the newly-devised oil contracts were talked about during the meeting.

He said many documents have been signed between the National Iranian Oil Company (NIOC) and Russian companies so far, adding NIOC is waiting for the Russian sides to submit their technical and financial propositions regarding the deals.

NIOC has also entered into talks with certain Russian companies like Lukoil for developing oil projects in Iran.

"We have agreed to hold a workshop early next calendar year (mid-2017) to elaborate more on details of the new Iran petroleum contracts where interested Russian companies will attend," he added.

Zangeneh also commented on US President Donald Trump taking office, saying his policies would benefit American oil companies more than others.

The official thanked Russia cooperating with the OPEC for the first time in history by curbing its output parallel with the organization in a bid to tackle the downward oil price in the market.

"Russia has announced it will stay committed to its promise to reduce its output so long as market stability is ascertained."

He further said the prices of over $55b or $60b would not benefit OPEC members, saying this would bring back American suppliers to the market and increase the countrys output, hence pushing the prices down again.

"As I and others in OPEC have said, the rise of prices to over 55 to 60 dollars per barrel would lead to price slump in the mid-term," he added.

Most market observes do agree that the oil market will be stabilized in 2017, the official argued. 14:46 -

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