Iran to follow OPEC’s decision on extension of oil production cuts

Iran will follow whatever decision the Organization of the Petroleum Exporting Countries (OPEC) makes at its meeting later this month regarding the extension of the oil production cuts, according to Iranian Minister of Petroleum Bijan Namdar Zanganeh.

“All indications are that the members want a renewal of the deal and we will go along with what they agree upon,” Zanganeh said on the sidelines of an energy trade show in Tehran.Producers outside OPEC that joined the oil pact would probably agree to keep the cuts for longer, he said.

Crude oil has surrendered all of its gains since OPEC agreed in November last year to cut output. Brent crude, the global benchmark, slumped to a five-month low of US$46.64 per barrel in New York trading on Friday, bringing prices down 14% for this year.

Zanganeh said he expects oil to trade at US$55 per barrel, although he did not say for what period.

Brent ended the week at US$49.10 per barrel. On November 30 last year, when OPEC clinched the deal to curtail oil production for the first time in eight years, oil closed at US$50.47 per barrel.

Iran was allowed to increase its output under the deal as the nation rebuilds from international sanctions that crippled its energy industry.

Since sanctions were eased in January, Iran’s oil production has climbed 34%, according to data compiled by Bloomberg.Iran’s now exports about 2.5 million barrels of oil per day, Zanganeh said.

Last month, Zanganeh told the Islamic Republic news agency that he expected Iran’s oil exports to average 2.4 million barrels per day for the Iranian calendar year that started March 21.

Iran was the third-biggest producer in OPEC last month, after Saudi Arabia and Iraq, according to data compiled by Bloomberg.

OPEC will meet on May 25 in Vienna to discuss the output cuts.