The file photo shows a view of installations at Irans Doroud oil field.[/caption]Iranian oil minister Bijan Namdar Zanganeh is preparing to visit the U.A.E. this week, underscoring the deepening concern among OPEC members over the slump in oil prices.
After trips to Kuwait and Qatar last week to discuss strategies to buoy prices, Zanganeh will meet with officials in the U.A.E. tomorrow, Shana, the Tehran-based oil ministrys news service, said on its website yesterday. The discussions come before the Organization of Petroleum Exporting Countries next scheduled meeting on Nov. 27.
OPEC producers have stepped up their diplomatic visits before the groups meeting in Vienna, potentially seeking a consensus on how to react to oil prices at a four-year low.Brent crude, a benchmark for more than half of the worlds oil, has plunged 30 percent since the end of June, sapping revenue for producers fromVenezuelato Saudi Arabia.
They want to stabilize the price, Tom James, managing director of consultancy Navitas Resources, said by phone from Dubai yesterday. They do have some coordination before meetings.
Irans OPEC Governor Hossein Kazempour, national representative Mehdi Asali and the countrys head of the oil contracts committee Mehdi Hosseini will accompany Zanganeh to the U.A.E., Irans oil ministry said.
Iraqi President Fouad Masoum and Libyan Prime Minister Abdullah al-Thinni flew toRiyadhlast week for separate talks with Saudi officials.Rafael Ramirez, Venezuelas foreign minister and representative to OPEC, held talks in Algeria and Qatar, whileSaudi Arabias Al-Naimi touredLatin America.
Irans Break-Even
Brent fell 50 cents to $78.91 a barrel on the London-based ICE Futures Europe exchange at 11:17 a.m. Singapore time. Front-month prices fell an eighth week through Nov. 14, the longest run of declines since the contract began trading in 1988. West Texas Intermediate lost 35 cents to $75.47 a barrel.
Irans revenue from crude sales, its biggest export, dropped 30 percent because of the decline in oil prices, Iranian President Hassan Rouhani said Oct. 29. Iran needs to achieve a break-even sales price of $143 a barrel this year to maintain its fiscal balance, according to data compiled by Bloomberg.
Falling oil prices are straining state budgets of members of the Organization of Petroleum Exporting Countries, includingIraq, which is leading a costly war against Islamist militants, andLibya, which is struggling to keep crude output steady amid political divisions and violence.
Libya Market
Libya and fellow OPEC states Venezuela andEcuadorhave called for action to stabilize crude prices. Kuwaits Cabinet wants OPEC consultations to stabilize oil, official Kuna news agency reported yesterday. The Cabinet and Supreme Petroleum Council held an extra-ordinary meeting to discuss the impact of lower oil prices on state revenue and investment, it said.
Libyas OPEC Governor Samir Kamal said Oct. 22 that the group must cut daily output by 500,000 barrels as the market is oversupplied by about 1 million barrels a day. This reflected his personal view, he said at the time.
Saudi Arabia, the worlds largest oil exporter and the biggest producer in OPEC, hasnt answered calls by other members for action to stem the price collapse and said that prices should be regulated by supply and demand. The kingdom remains committed to seeking a stable oil price and speculation of a price war between crude producers has no basis, its oil minister,Ali Al-Naimi, said Nov. 12.
Market Stability
Certain countries had raised their production after the exit of several countries from the cycle of oil production, Irans Zanganeh said, according to Shana. Now it is difficult for them to reduce their production for the market stability and they fabricate different pretexts for their action, he said, without identifying the countries.
Oil production in Iran was 2.77 million barrels a day in October, down 10 percent from September, according to data compiled by Bloomberg. Irans economy has been hampered by international sanctions imposed over its nuclear program, according to the countrys President Hassan Rouhani andInternational Monetary Fund.
Iran will draw on its sovereign fund to cope with falling oil prices, Zanganeh said, Shana reported on Nov. 15.
By Bloomberg
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