Algerian energy minister has lent weight to Iran’s bid to regain market share through stepped-up oil production despite objections from Saudi Arabia.
Algeria is about to host a meeting of OPEC and non-OPEC oil producers later this month, with the issue of capping production expected to be the focus of the discussions.
“Iran has the right to increase production to the pre-sanctions level,” Algeria’s Noureddine Bouterfa said in Moscow on Friday, referring to 2012 Western sanctions which cut Iranian oil exports by more than half.
Bouterfa visited Tehran last Saturday as part of his whirlwind tour of several countries to build consensus among major producers “to strike a balance in the oil market in order to prop up prices in a reasonable way.”
The Algerian minister has sounded upbeat about the results of the OPEC meeting in his country, saying all conditions were ready for reaching a consensus among members.
“OPEC members are trying to reach a price of $50 to $60 per barrel and we have made a request for reaching consensus on a price and coordination among OPEC members in this regard,” Bouterfa said.
The last effort to strike a freeze deal fell through after Saudi Arabia insisted that Iran should join the initiative.
In Moscow, Bouterfa said oil producers could accommodate an increase in oil production by Iran as well as Nigeria and Libya. “All the solutions are possible,” he said.
Russian Energy Minister Alexander Novak reiterated his country’s support for a freeze deal. “We hope that the divisions within OPEC will soon be overcome and a compromise solution would be found,” he said after talks with Bouterfa.
Russian President Vladimir Putin has said a potential freeze deal should involve some compromise on Iran’s production levels.
“Iran is starting from a very low position, connected with the well-known sanctions in relation to this country,” the Russian president said last week, adding, “It would be unfair to leave it on this sanctioned level.”
It was not immediately clear whether Saudi authorities would give way to a consensus this time around even as Iran has reiterated its determination to continue ramped-up production.
Bouterfa was to meet Saudi Oil Minister Khalid al-Falih as well as OPEC Secretary General Mohammed Barkindo in Paris next to evaluate the situation.
The Algerian minister did not rule out the collapse of the talks in his country, saying should they fall apart, OPEC members would continue their dialog at their next official meeting in Vienna.
“If we have an agreement in Algiers it’s very good but if we don’t have an agreement, it’s also good,” he said.
Global oil prices have seen a fall from a high of 147 dollars a barrel to a low of around 25 dollars in recent years.
Putin has held Saudi Arabia responsible for failed attempts to reach a freeze pact in April, saying “it was our Saudi partners who at the last minute changed their point of view and decided to take a time out in taking this decision.”