Tags: oil | production | Iran | Iraq

Financial Times: Iran Could Ignite an Oil-Price War

Wednesday, 04 Dec 2013 01:39 PM

By John Morgan

  Comment  |
   Contact  |
  Print   |
    A   A  
  Copy Shortlink
Iran is threatening to spark a global oil-price war, saying it intends to boost production no matter what OPEC does, the Financial Times reported.

The stance threatens to foster disarray among the cartel members that were intent on keeping production targets unchanged at their meeting this week.

Editor's Note: Seniors Scoop Up Unclaimed $20,500 Checks? (See if You qualify)

Bijan Zangeneh, Iran’s oil minister, told Iranian journalists, “Under any circumstances, we will reach 4 million barrels per day even if the price of oil falls to $20 per barrel,” according to the Times. Iran currently produces 2.8 million barrels daily.

“We will not give up our rights on this issue,” Zangeneh insisted.

Iran’s display of muscle ultimately could put downward pressure on prices, and if its production hike comes to pass it could force OPEC to trim production from other members in order to avoid over-supply in world markets.

In neighboring Iraq, energy officials are also making noise about raising production by 1 million barrels per day in 2014 to 4 million barrels.

The Times predicted Saudi Arabia would likely face the most pressure to curtail production in the face of increases by Iraq and Iran, since it is the world’s largest oil exporter and has been producing at record levels of more than 10 million barrels daily.

Ali al-Naimi, the Saudi oil minister, told journalists Iran’s threat could harm more than OPEC members.

“You are preoccupied by Iran and that is not a good preoccupation,” he said. “You know what is going to happen if the price goes to $20? You know how many countries would be out of producing, including shale oil, including Canadian sands oil, including subsalt oil. All of that will be gone.”

The Voice of America reported it is unlikely Iran or Iraq could break OPEC ranks and unilaterally raise production in a major way in the short run.

Zangeneh conceded it would take Iran about six months after current economic sanctions against the country are lifted to return to full capacity of 4 million daily barrels, the VOA said. The lifting of those sanctions is dependent on a favorable outcome in negotiations with the West on an Iranian nuclear deal.

The VOA also reported it may be overly optimistic for Iraq to elevate its own production to 4 million daily barrels because of infrastructure problems and security issues there.

“Iraq has serially failed to meet its expansion targets in recent years and this latest pronouncement stretches credibility,” said Bill Farren-Price of Petroleum Policy Intelligence, a consulting firm.

Editor's Note: Seniors Scoop Up Unclaimed $20,500 Checks? (See if You qualify)

Related Stories:

© 2014 Moneynews. All rights reserved.

  Comment  |
   Contact  |
  Print   |
  Copy Shortlink
Around the Web

Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Country
Zip Code:
Privacy: We never share your email.
 

You May Also Like
Around the Web

Most Commented

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved