Tehran, Iran, Dec.10
Trend:
The recent agreement by the oil producing countries to cut output by 1.2 million barrels per day was deeper than expected, according to an analyst.
Such a commitment of OPEC members toward this decision is a big win for Iran," the ex-Chairman and current consultant to the Energy Commission of Iran Chamber of Commerce Hamed Farnam told Trend.
"OPEC is an economic cartel that wants to have a leading role in the market, therefore the more countries commit to the agreements, the more they can profit," he said.
"During past fifty years, the cartel has faced with many ups and downs. But in general, it has remained committed to agreements, to preserve profits. So, there is hope over this last OPEC agreement," Farnam said. "However, Saudi Arabia has kneeled before the Trump orders to save its political plans."
According to the OPEC agreement on Friday, Saudi Arabia will make the biggest output cut, while Russia a non-OPEC member would follow. An agreement remained elusive, as Iran insisted on an exemption from production curbs.
"At first, the increase of global consumption should be considered, while the average oil output has dropped, Saudi Arabia still produces more than its average in quotas in the previous years, which is due to high demands and consumption," Farnam said.
Saudi Arabia has increased its output to compensate for Iran's oil shortage. Currently, according to the new agreement, Saudi Arabia's surplus would be less.
"Iran's profit in OPEC is not the cause of Saudi Arabia losses. Iran is supposed to produce and sell as much oil as it wanted to, with OPEC's approval, thus the outcome of the meeting was successful," said the analyst.
The analyst estimated Iran's output capacity up to 4 million barrel per day.
"At the moment Iran does not have this capacity, and its maximum output depends on status of oil wells. It is possible that a well can produces at less than the maximum level, therefore the capacity is 3.800 million barrels a day. This would depends on oil costumers," he said.