Iran won’t participate in OPEC’s oil production reduction

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According to vice-president of National Iranian Oil Company (NIOC) Mohsen Ghamsari, Iran intends to increase the production and export of oil, since it is not a party of OPEC’s restriction agreement.

According to him, during talks in Algiers an exception was made for Tehran, and the plans of the republic remained the same. Iran plans to increase oil production to 4.2 million barrels a day, and exports – to 2.4 million barrels a day.

In the first half of the year Iran exported 2 million barrels daily, including 600-650 thousand barrels per day to Europe, Ghamsari said.

Algiers Agreement of OPEC, where it was decided to reduce production from 33.2 to 32,5-33 million barrels a day, only added to the uncertainty, and the market is likely to “enhanced version of the verbal intervention”, said Morgan Stanley analyst Adam Longson. He noted that no real reversal happened in the cartel’s policy.

“We have seen a lot of these “pieces of paper” that do not oblige the parties. They have more political, or propaganda significance, or PR value. But such paper may only cause some very short effect to the market,” agreed partner of RusEnergy Mikhail Krutikhin.

According to Longson, sales are already underway: American shale producers actively hedge their deliveries in 2017, using the price of 50-55 dollars per barrel.

According to the CFTC, for the week to September 27, the oil companies sent to the market contracts for 16.93 million barrels of WTI.

Source: finanz.ru