TEHRAN, Aug. 28 (UPI) — Iran must ignore the lower price of crude oil and work to increase the rate of production to ensure its share of the market, the country’s oil minister said.
Iran, since reaching a multilateral nuclear agreement that could bring sanctions relief, has hosted representatives from companies like Italy’s ENI and Royal Dutch Shell.
Iran’s crude oil production in July was around 3.1 million barrels per day, an increase of six tenths of a percent from the previous month and about 13 percent less than the peak rate in the pre-sanctions era.
OPEC’s policy of maintaining a steady level of production to ensure adequate market share and satisfy growing demand from Asian economies is in part behind the 50 percent drop in crude oil prices from last year.
Iran’s oil minister said his country can’t base its decisions on price alone.
“We do not worry over oil prices,” he said. “If we did so, we should have stopped production of oil. But we are not allowed, at any costs, to lose our historical share in the oil market.”
Zangeneh said Iran’s economy has been able to navigate through sanctions and low oil prices therefore are not a major concern.
Iran’s economy emerged from recession in late 2014, though sanctions still curb the country’s ability to generate revenue from oil and gas sales. The Central Bank of Iran, however, said a nine-month growth rate of 3.6 percent represents an increase in $54 billion.
In March, the bank said it was expecting future growth of 1 percent if sanctions stay in place and as much as 3 percent once sanctions are removed.
Under the existing sanctions regime, Iran is limited to exports of around 1 million bpd and to just six consuming nations, mostly in Asia.
“If we forgo our market share, we will have to fight to sell even 20,000 barrels in the market,” the minister said. Therefore, we will strongly return to the market after the sanctions relief and will take back our share.”