Iran sought to resurrect quota system at Opec meeting -Shana

Dubai: Iran sought to bring back Opec export quotas at the group’s meeting in Vienna last week, the oil news agency Shana reported.

Iran’s Opec governor Hossein Kazempour Ardabili sent a letter to the group’s secretariat last week proposing “a technical price formula that can resurrect the quota system and also prevent prices from falling”, Shana reported on Saturday.

Oil Minister Bijan Zanganeh also wrote to the Organisation of the Petroleum Exporting Countries ahead of its June 5 meeting, insisting on Iran’s right to return to the market if oil sanctions, imposed in 2012 because of the country’s nuclear programme, are lifted.

Opec decided to stick to its policy of unconstrained output for another six months, with oil prices having rebounded to around $65 a barrel after hitting a six-year low of $45 a barrel in January.

The group’s current output levels are much higher than the its official output ceiling of 30 million barrels per day.

Iran’s proposal for a revival of export quotas would allow it to return to the market in force. But this has faced resistance from other Opec members who would have to cut their own output under a quota system to accommodate Iran’s return.

In his letter, Zanganeh said Iran could add 1 million barrels per day (bpd) to its production within six to seven months of sanctions being lifted. This could occur if the Islamic republic reaches a deal with world powers on its nuclear programme.

Most analysts say that figure is optimistic, but even a smaller and slower increase in Iranian exports would pump more oil into an already oversupplied market, adding to pressure on prices.

Iran and six major powers reached a framework nuclear deal on April 2 in Lausanne, Switzerland, and are seeking to strike a final agreement by June 30 under which Iran would restrain its nuclear program in exchange for sanctions relief.