DUBAI: Iran’s oil exports are being hurt by current high prices that make it more economical for rivals like the United States to produce more costly oil, Iran’s new energy minister said in an interview published by his ministry’s website yesterday.
A week into the job, returning oil minister Bijan Zanganeh, who previously filled the post under the reformist president Mohammad Khatami, told oil ministry news service Shana that current prices of over $106 a barrel were a worry.
His comments represent a shift in stance from those of Iran’s previous oil minister who repeatedly said he wanted oil prices to remain above $100 and played down the impact of sanctions on exports.
“The crude price increase to this level represents both opportunity and threat... It is an opportunity for us to increase our revenues (but) high oil prices also represent a threat for our country, because our rivals can produce oil at high price and supply it on the market,” Zanganeh said.
Benchmark Brent crude oil prices have largely remained above $100 per barrel since early 2011, spurring a surge in production of relatively costly shale oil in North America.
That has helped swell global oil supplies, enabling Washington to tighten restrictions on Iranian oil exports without causing a price spike that might threaten global growth.
“Today, the U.S. is investing mainly in shale gas and shale oil production...with these prices, shale gas and shale oil production will be economical for them,” Zanganeh said, adding he did not expect any drastic change in oil prices in the third quarter of 2013.
He said that he was optimistic that the new Iranian government, which has adopted a more conciliatory stance in its nuclear standoff with Western powers, could revive oil exports.