DUBAI: Iran’s oil minister accused some countries yesterday of making up excuses to justify their refusal to stabilise prices by cutting output, a possible reference to Saudi Arabia as a Saudi official insisted the issue should be left to market forces.
“Certain countries had raised their production after the exit of several countries from the cycle of oil production,” Iran’s Bijan Zanganeh said, referring to international sanctions that have forced his country to cut its exports sharply.
“Now it is difficult for them to reduce their production for market stability and they fabricate different pretexts for their action,” Zanganeh said, quoted by his ministry’s news agency Shana.
Zanganeh did not name the countries but he may have been referring to Saudi Arabia, the world’s top oil exporter and dominant force within the Organisation of the Petroleum Exporting Countries.
Saudi Finance Minister Ibrahim Alassaf said yesterday that while his country had been praised in the past for preserving oil market stability, “Everybody agrees that the issue is subject to supply and demand and has to be left to supply and demand”.
Brent crude oil last week hit four-year lows below $80 a barrel on concerns about oversupply. Oil has fallen from a June high above $115. Few analysts think Opec will do much to prop up prices when it meets on November 27.
Zanganeh visited Qatar and Kuwait last week, ahead of the meeting, in a bid to win support for action to stabilise oil markets, though there was no sign that those countries would cooperate with Iran. He plans to visit the United Arab Emirates on Tuesday.
Iran plans to tighten spending and raise taxes to help offset the negative impact of sharply lower oil prices and international sanctions on the state budget, Zanganeh said.
Iran is heavily reliant on petroleum exports and adopted a budget for the current fiscal year based on a projected price of $100 per barrel.
“Iran intends to adopt a contractionary monetary policy for next year and raise tax revenues to compensate for the affects of the oil price slide.” Zanganeh did not provide details on plans for the next fiscal year, which will run from March 21, 2015 through March 20, 2016. Also, he did not provide any up-to-date information on the state of the budget. The minister travelled to Kuwait on Tuesday to discuss the sagging market with the country’s Emir H H Sheikh Sabah Al Ahmad Al Jaber Al Sabah, Shana said.
Zanganeh said on Saturday that Tehran would dip into its sovereign wealth fund to cope with the economic impact. Iran’s finances are being hit not only by the weaker crude market, but also by international sanctions on finance and oil exports imposed over its controversial nuclear energy programme. Exports have plunged from more than 2.2 million barrels a day in 2011 to a current level of around 1.3m b/d.
And Rafael Ramirez, oil minister of Venezuela, is to visit Tehran to discuss a proposed call from Caracas and Ecuador for Opec to cut production. Agencies
