Calls are growing in Tehran that the Islamic Republic should join an emerging oil freeze plan to help stabilize prices in international markets.
Mehdi Assali, Iran’s former director general for OPEC affairs at Iran’s Ministry of Petroleum, said Iran should agree to the freeze plan which is expected to be raised at the upcoming OPEC summit in Algeria.
Assali emphasized that Iran should in return become exempt from the plan for a limited period until it retains its lost share of the market.
He said Iran’s pledge to avoid any major increase in its oil production during the implementation of the oil freeze plan is necessary. Instead, Assali said, the country should tune any increase in its oil production according to the situation of the market – what he said is necessary to keep the oil freeze plan effective, Shana reported.
Oil prices have fallen by more than two-thirds, from over $100 a barrel to under $30 since 2014 amid a global supply glut for which Saudi Arabia is chiefly to blame.
OPEC and non-OPEC oil producers are about to meet in Algiers later this month to discuss capping oil production which remains at record highs amid stepped-up pumping by Saudi Arabia and others.
Tehran has been calling on OPEC to restore the quota system which was scrapped in December 2011 under the Saudi initiative.
With differences hardly resolved, there are reports that participants in the upcoming talks would be moving from a production freeze to voluntary output caps.
Iran has so far rejected the call to freeze its output as unfair and emphasized that it will go ahead with its plans to increase its oil production.
Nevertheless, it had made it clear that it is ready to join the plan after its output reaches 4 million barrels per day.
The country had been under multiple years of sanctions that limited its oil exports to 1 million barrels per day and also barred foreign investments in its oil industry.
The sanctions were lifted in January after a nuclear deal that Iran had reached with the so-called P5+1 group of countries – the five permanent members of the Security Council plus Germany – came into effect.