Iran’s Zanganeh calls for Opec ceiling cut

OREANDA-NEWS. Opec should cut its 30mn b/d production ceiling by 5pc, Iranian oil minister Bijan Namdar Zanganeh said today.

Ministers of Opec countries are set to meet in Vienna in early June.

Zanganeh's suggested target, 28.5mn b/d, is nearly 9pc lower than Opec's wellhead production level of 31.27mn b/d seen in March, according to Argus estimates. "Even the most conservative Opec member states do not believe that Opec production should exceed 30mn b/d," he said.

On 16 April, the Opec secretariat will release its monthly market report, giving member countries' own data for March production.

In calling for Opec to remove 1.5mn b/d from the market, Zanganeh wants the oil exporting countries organisation to clear market space for Iranian barrels. Yet this is an unlikely prospect: Opec's Saudi-led decision to maintain its 30mn b/d production target last November appeared to be driven by jostling for market share.

Zanganeh recently said that Iran is prepared to boost crude exports by 1mn b/d after the US and EU lift sanctions targeting the country's oil and gas sector. "Opec is mature enough to regulate itself so that the market would not be harmed after Iran returns to its previous quota," he said on 14 April.

Iran and the P5+1 group of powers reached an interim deal on the future of Iran's nuclear programme on 2 April, although further rounds of tough negotiations are likely ahead of a 30 June deadline to reach a finalized agreement.