Iran oil ministry news service warns on prices

OREANDA-NEWS. September 16, 2015. An article published by Shana, the news service of Iran's oil ministry, warns that "if Opec members fail to consider their export ceiling of 30mn b/d, the price of both unconventional and conventional oil supplies will drop dramatically, putting unprecedented pressure on major suppliers whose economies are deeply dependent on petrodollars".

The article points to Saudi Arabia and some other other Opec members as "disregarding Opec's agreed 30mn b/d ceiling", causing a 2mn b/d global surplus. This would rise to as much as 3.5mn b/d by the time Iran increases its output by 1mn b/d after US and EU sanctions are lifted, the signed article says, pushing prices lower. The Iranian government has said it can boost production by 1mn b/d quickly after sanctions are lifted, although this claim has been met with scepticism. But the point of the article appears to be to assert that Iran intends to reclaim what it sees as its rightful, pre-sanctions market share even if that causes further deterioration in prices.

Such a price fall would not be Iran's fault, the article argues. It says the rapid development of US and other unconventional oil production pulled prices down from their pre-summer 2014 \\$100/bl level. But it also argues that on three occasions this year, prices have fallen below \\$50/bl only to bounce back. It proposes that unconventional producers "have to stay out of the market" at below \\$50/bl but "flood the market" once prices pick up. "If shale oil supplies caused prices to fall from above \\$100/bl in 2014... Saudi Arabia and other oversuppliers must be blamed for the fall of prices to below \\$50/bl in 2015".

The content of the article is not attributed to a senior oil minister official. It is signed by Peyman Jonoubi, described as a commentator and journalist for Shana. But the news service acts as a mouthpiece for the oil ministry.