Ambiguity surrounds Iran's next move in oil markets

Ambiguity surrounds Iran's next move in oil markets
World powers await Iran's move after oil production agreement as no clear commitment is given by Tehran to reduce oil production
2 min read
19 February, 2016

Mystery continues to surround Iran's position on the implementation of a regional oil production deal as news emerges that the nation did not explicitly declare it will keep its oil production at January levels.

Iranian economist, Ali Forouzandeh told The New Arab that the announcement by the Iranian oil minister, Bijan Zanganeh "does not necessarily mean that Tehran would cut production".

Due to the lack of explanation provided by the parties concerned at the Tehran quadrilateral meeting, "no one actually knows what was agreed behind the scenes", he said.

Forouzandeh added that the Iranian position generally means that Tehran is sending positive signal and is trying to merge with the rest of the member states of OPEC, while aiming to restore good ties with the international oil organisation.

He described the move as one which will eventually improve the escalating oil prices which he believes are "harming Tehran's interest."

On the sanctions, Forouzandeh mentioned Tehran's great losses during the sanctions period. "Iran lost a significant market share over the past years due to Western sanctions," he said.

But despite the show of progress, Forouzandeh said he cannot predict exactly what would happen in the near future and does not know whether oil prices will stabilise as the initiative aspires to achieve.

However, the Iranian position contradicts the stance taken at a meeting held in Doha on Tuesday, which hosted Saudi Arabia, Russia and Venezuela.

The global powers agreed on increasing oil output with specific focus placed on Iraq and Iran.

Zanganeh said he supports any initiative which aims to revive oil markets and has assured he will increase the price of an oil barrel which remains critically low.

This comes after ministers from Qatar, Iraq, and Venezuela allegedly held closed-door meetings in Tehran.

Iranian officials have previously promised to increase oil output as soon as western sanctions are lifted. However, their support of this arrangement could possibly delay this Iranian objective.