Fears of increasing oil production if Iran returns to the market (Getty)
The Arab oil and energy ministers said on Sunday that… OPEC+ Commitment to its current agreement, which adds 400,000 barrels per day to production per month, during their participation in the International Conference on Petroleum Technology in Riyadh.
Iraqi Oil Minister Ihsan Abdul-Jabbar said, according to “Archyde.com”: “For the sake of energy markets In its entirety, OPEC+ must remain committed to the current “continued and sustainable agreement” in order to avoid facing any surprises.
The Organization of the Petroleum Exporting Countries (OPEC) and its allies led by Russia, known as OPEC+, agreed on February 2 to stick to moderate increases in their oil production.
The group is already making efforts to meet current targets, and is wary of responding to calls from major consumers to pump more crude to curb price hikes.
Abdul-Jabbar’s statements came during a session that included the Saudi, Emirati and Bahraini energy ministers, the Kuwaiti Oil Minister and the Egyptian Oil Minister, following the opening of the conference.
Saudi Energy Minister Prince Abdulaziz bin Salman said that focusing only on renewable energy sources was a mistake and that the world may not be able to produce all the energy needed for economic recovery from the Corona virus pandemic, adding that “the epidemic and the ongoing recovery taught us the value of being vigilant.”
Suhail Al Mazrouei, UAE Minister of Energy, said that the group is on a journey to gradually increase oil production, while Kuwaiti Oil Minister Mohammed Al-Faris said that OPEC + is very sensitive to market reactions.
Iran’s return to the oil market
Sources close to OPEC + told Archyde.com last Friday that the group will work to include Iran in the agreement to limit oil supplies if a settlement is reached to revive its nuclear agreement with world powers, in an attempt to avoid competition for market shares that may harm prices.
The International Energy Agency says the success of the talks might lead to the lifting of US sanctions on Iran’s exports, bringing 1.3 million barrels per day of Iranian oil back to the market.
That might ease tight global supplies and ease some of the tension that has pushed oil prices to just under $100 a barrel.
And Iran is excluded from the current agreement between the Organization of the Petroleum Exporting Countries (OPEC) and its allies, in what is known as the (OPEC +) group, to limit oil supplies, due to the impact of sanctions on its exports.
Iran is pumping regarding 2.5 million barrels per day, regarding 1.3 million barrels per day less than it was in 2018, when former US President Donald Trump withdrew from the nuclear deal and reimposed sanctions, which led to a significant decrease in Tehran’s oil revenues.
At the end of trading last Friday, Brent crude futures rose 57 cents, or 0.6 percent, to $93.54 a barrel, while US West Texas Intermediate crude closed down 69 cents, or 0.5 percent, at $91.07 a barrel.
The two benchmarks reached their highest levels since September 2014 last Monday, but the prospect of easing oil sanctions on Iran affected the market. Brent crude rose slightly by 0.9 percent for the ninth consecutive week of gains, while West Texas Intermediate crude fell by 1.7 percent this week.
Fears of possible supply disruptions as a result of the Russian military build-up on the Ukrainian border limited losses this week.
(Archyde.com, The New Arab)
