Iranian and Iraqi officials on Wednesday welcomed moves by other major oil exporters to limit output, but Iran said it would reject any effort to limit its ability to revive production now that international sanctions on its petroleum industry have been lifted.
Iranian Oil Minister Bijan Namdar Zanganeh said that the production “ceiling” at current levels proposed Tuesday by Russia and Saudi Arabia should be a first step toward stabilizing the market. But in remarks quoted by Tehran’s Shana news agency, he did not say that Iran would keep its own output at January’s levels.
Meanwhile, an Iraqi Oil Ministry official said in an interview that his country would be willing to accept limits to bolster prices.
“Iraq is ready to agree with any decision that serves the drop in oil prices, because Iraq is suffering from this sharp drop in oil prices and has lost lots of money,” Oil Ministry spokesman Asim Jihad told The Washington Post. “Iraq can sacrifice in freezing its production because it’s going to lead to an increase in oil prices. . . . What’s the benefit of selling oil with low prices?”
On Tuesday, oil ministers from Russia, Saudi Arabia, Venezuela and Qatar announced that they had agreed at a meeting in Doha, Qatar’s capital, to maintain oil production at January levels if other exporters would join them. Oil markets at first greeted the accord with skepticism, in part because of uncertainty about Iran and Iraq and in part because current production levels are already high.
But oil ministers continued consultations Wednesday in Tehran, and crude oil prices jumped about 6 percent by early afternoon.
Over the past year and a half, oversupply in the market has driven down crude oil prices and rocked global commodity and stock markets.
Iran has vowed to gradually increase its oil production this year by about half a million barrels a day, taking advantage of export opportunities now that international sanctions on its petroleum sector have been eased as part of the accord limiting its nuclear program.
In comments published in the Shargh daily newspaper on Wednesday, Mehdi Asali, Iran’s envoy to the Organization of the Petroleum Exporting Countries, said that Iran was sticking to its targets and should not be expected to rebalance an oil market thrown out of whack by the policies of other exporting nations while Iran was restricted by the sanctions.
“Asking Iran to freeze its oil production level is illogical. . . . When Iran was under sanctions, some countries raised their output and they caused the drop in oil prices,” Asali said.
“How can they expect Iran to cooperate now and pay the price?” he added. “We have repeatedly said that Iran will increase its crude output until reaching the pre-sanctions production level.”
In Moscow, however, Russia’s representative to OPEC, Vladimir Voronkov, told the news agency Interfax that Moscow still hopes Iran will comply. “We would positively assess such a decision of Tehran,” he said.
Iran’s production in January reached just under 3 million barrels a day, about 600,000 barrels a day less than its capacity, according to the International Energy Agency.
Iraq had also been expected to resist limits on its oil production, which Iraq needs to revive its economy and fund its war against the Islamic State. Some analysts noted that freezing its production at current levels was not a large concession because Iraqi production reached a record of 4.35 million barrels a day in January, according to the IEA.
“This freezing is going to be a temporary procedure aimed at saving countries that produce oil,” the Iraqi Oil Ministry spokesman said. “We were hoping that OPEC would have decided this a long time ago because the countries in OPEC, including Iraq, have lost billions of dollars.”