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Wednesday, January 17, 2018

“Iran will determine the price of oil”

Low prices of “black gold” gave the opportunity to Iran to blackmail all other major exporters. The last is ready to reduce extraction of raw materials, to reduce excess fuel on the market and thus increase the price. Tehran is counting on your backup volumes. As stated by the oil Minister, Bijan Zanganeh, the country is able to increase the production of raw materials doubled to 4 million barrels a day. Only under such conditions Tehran intends to discuss the freezing of oil production. Until then, according to Zanganeh, the negotiators should leave Tehran alone. It is noteworthy that this statement by the oil Minister made on the eve of his meeting with the head of the Ministry of energy Alexander Novak, to be held March 14. How will the market react to the Iranian ultimatum, “MK” asked the experts.

Photo: Paul Lowry

“Until we have reached a production level of 4 million barrels a day, they (the negotiators of freeze extraction) should leave us alone,” said oil Minister Bijan Zanganeh. He noted that Iran is an acceptable price of oil is $70 for a barrel. However, when low cost raw materials “there will be no problem”. Now Iran is exporting 1.75 million barrels of oil a day, but in the near future this indicator, according to Zanganeh, will increase to 2 million barrels.


Sergey PIKIN, Director of energy development Fund:

“Iran thus gave certainty, stating that its production level of 4 million barrels per day, while Saudi Arabia has over 9 million barrels, and Russia — more than 10 million barrels. This news will help to more accurately estimate the balance of supply and demand. In fact, Tehran has said that when he will reach 4 million barrels a day, he would rejoin the coalition. Before that, there was a sense that the coalition is not formed and fall apart as it will not be Iran. In fact, with this position of Tehran to sign an agreement between the countries — exporters of oil”.

Artem DEEV, head of the analytical Department AMarkets:

“Iran’s trading, as it lost the market because of sanctions. And now he needs to increase its share to become an equal participant in the negotiations. Tehran is ready to do even at low oil prices because is less favourable terms than the other participants. Currently, the leading producers want to increase commodity prices, and Tehran is likely expresses such a tough position to get favorable terms. For example, to agree on market share or shipments to certain countries. It can go on the interim solution. Now there has been a sharp reduction in drilling rigs in the U.S., that will inevitably lead to the decline of oil reserves. Analysts agree that the bottom of the market passed, and it is only Iran to change this state of Affairs difficult. Moreover, the increased supply from this country is at a low rate. However, Saudi Arabia will closely watch the actions of Iran, and Tehran’s reluctance to reduce supply could derail the overall agreement. As for Russia, our economy is showing good adaptability to the crisis, and after pricing at $28 a barrel to $40 will not seem quite dire. Especially considering that at this rate it was calculated the stress scenarios for the economy. If the tendency to increase of quotations continues, in the second half of the year you can expect $45-50 per barrel.”

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