If Iran keeps its end of the bargain, the West may further open its markets to Iranian goods.
Iran’s Oil Minister Bijan Zangeneh says his country is ready to negotiate with Saudi Arabia and other OPEC members over the dire conditions in international oil markets.
Tehran recently resumed oil exports after Western sanctions over its nuclear programme were lifted, and announced it plans to produce 500,000 barrels a day.
The move will add significant pressure on an already oversupplied market, as the Organization of the Petroleum Exporting Countries continues to refuse to cut its production.
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“We support any form of dialogue and cooperation with OPEC member states, including Saudi Arabia,” Zangeneh told reporters.
The Iranian oil minister said in early January that certain countries’ insistence on overproduction was politically motivated.
“If there were a strong political will, the price of oil would have been balanced within one single week,” Islamic Republic News Agency (IRNA) quoted him as saying.
“None of the oil producers is happy with the existing prices, which will harm suppliers in the long term.”
Zangeneh added that Iran needs as much as $200bn in investments to revamp its oil industry.
The global oil sector has taken a beating since the summer of 2014, losing about 70 percent of its value. OPEC countries have refused to budge on the flooded market, keeping in place a 30 million barrel a day production ceiling.
Another senior Iranian official said on Wednesday the country cannot cut crude oil production because it needs to regain market share and return to pre-sanctions output levels.
Asked if Tehran was ready to coordinate a production cut to support the oil market, Masoud Hashemian Esfahani, the acting deputy oil minister, told Reuters news agency: “We do not like to cut. We need to [get] back our share.
“The [oil] price completely depends on [the] market situation and we have a surplus of supply now. Maybe some countries must cut their share and many countries [must] get back their share,” Esfahani said in Moscow.
OPEC increased its total oil production by 131,000 barrels per day (bpd) in January even though oversupply has been a major reason for falling oil prices, according to data issued by the cartel.
The Vienna-based group of mostly Arab, African and Latin American countries said on Wednesday they pumped 32.3 million bpd last month.
Saudi Arabia and other Arab members of OPEC have so far stopped the group from propping up prices by lowering output, in an apparent effort to use the current slump to win market shares from the US, where oil production is costlier than in the Gulf.
Meanwhile, oil prices rebounded on bargain-buying in Asia on Wednesday after the previous day’s plunge, but analysts warned that any gains would be limited as the global glut that has hammered markets showed no sign of letting up.
Crude prices have crashed from above $100 a barrel in July 2014 to under $30 after being hit by a perfect storm of overproduction, oversupply, weak demand, and a slowdown in the global economy, particularly the key consumer China.
A report by the Kuwait Financial Centre released on Tuesday said that the oil-rich states of the Gulf Cooperation Council are expected to see their public debts double and their assets decline by one-third by 2020 as they seek to finance budget deficits.
The report noted that GCC countries face a combined $159bn deficit in 2016. In contrast, the GCC posted a combined surplus of $220bn in 2012.
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