Iran is optimistic about reduction of oil yields

Iran is optimistic about negotiation of the proposed reduction of oil yield, according to the country’s Oil Minister Bijan Zangeneh. The meeting of OPEC will be held in end of November in Vienna, where the members of organization will discus limiting of oil production in attempt to stimulate growth of prices and reduce the overcapacity on the market.

Iranian Oil Minister Bijan Zangeneh met with OPEC Secretary General Mohamed Barkindo in Tehran to discuss the agreement, which aims to reduce production by up to 1.3 million barrels per day. He expressed optimism in finalizing the deal.

“We are receiving positive signals that increase the likelihood of agreement at the meeting … and I’m optimistic about the situation”, said Bijan Zangeneh. “I think if we can reach an agreement, God willing, the price would rapidly reach above $50 per barrel … If non-OPEC (producers) also cooperate, I don’t think $55 per barrel would be out of reach”, added he.

OPEC is trying to reduce production for the first time in eight years. In Algeria in September it was reached an agreement to limit production, which was complicated by the request of Iran to strengthen its production and conviction of Iraq that should be excluded from the agreement in order to finance its war against Islamist terrorists.

After reaching record values in 2016 of nearly 52 USD per barrel last month, the oil prices dropped amid doubts about OPEC’s ability to implement a deal to end the two-year policy of unlimited yield. Without agreement at the meeting in Vienna on 30 November, the International Energy Agency expects fourth consecutive year of oversupply in 2017.

On Friday, OPEC said it had made progress on the deal to reduce production after consecutive round of negotiations with Russia, but has left critical details – such as the role of Iraq and Iran to be resolved in Vienna. Although the ministers of Saudi Arabia and Algeria confirmed its target to reduce the group’s production to 32.5 million barrels per day, they did not provide clear information on how we deal with resistance from Iraq and Iran. They did not want Russia to do more to limit the extraction of its current levels, which are record.

The Iranian Oil Minister Bijan Zangeneh said that Barkindo met with senior Iraqi officials to discuss the resistance of the country to reduce production, as the result of these talks was promising. Barkindo has asked Zangeneh to show “more flexibility” in talks in Vienna to ensure that the agreement of Algeria will be applied.

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