Iran to force OPEC to cut production

Iran to force OPEC to cut production

Baku, Azerbaijan, Apr. 30

By Aygun Badalova - Trend:

After lifting the West's sanctions from Iran, the Saudi Arabia may reconsider its stance regarding OPEC's production quotas, i.e., its refusal to reduce the production, Vladimir Sotnikov, the senior fellow at the International Security Center of the World Economy and International Relations Institute told Trend April 30.

"As soon as it becomes clear that Iran joins the game as a full-fledged oil player and a competitor of Saudi Arabia, the latter can support the reduction of the quota set by OPEC," Sotnikov, who is also the senior fellow at the Middle East Department of the Russian Sciences Academy's Oriental Studies Institute, said.

Currently, OPEC controls 40 percent of world oil supplies. OPEC's oil production quota stands at 30 million barrels per day.

During a meeting, held in November 2014, the cartel decided not to change the quota, despite the falling oil prices at the time and the persuasions of some countries to cut production to stabilize prices.

However, the position of Saudi Arabia, which refused to cut the production, has become an obstacle for OPEC on the way to the quota reduction.

Earlier, Saudi Arabia said its oil production is likely to remain at 10 million barrels per day, as the Asian demand for oil remains strong, and the country is ready to supply any required volume.

The next meeting of OPEC member countries will be held June 4, following which it is scheduled to take a final decision on the issue of quotas for oil production.

Sotnikov said that at the upcoming meeting, Saudi Arabia would once again play a leading role.

In light of recent events connected with the Iranian nuclear issue and the prospects for building volumes of production and export of oil by the Islamic Republic, the expert believes that there is a possibility that Saudi Arabia will change its positions regarding the quotas.

"The country may revise its commitments and affect the rest OPEC member countries in order to make a collective decision," he said.

Oil production in Saudi Arabia in March amounted to 10.01 million barrels per day compared to 9.663 million barrels per day in February, according to OPEC's latest monthly report.

Oil production in Saudi Arabia in 2015 will increase by 0.5 million barrels compared to 2014 and reach 10.2 million barrels per day, according to analysts at JP Morgan.

Edited by CN

Follow the author on Twitter: @AygunBadalova

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