Iran's former OPEC governor talks global oil market

Oil&Gas Materials 23 November 2020 11:37 (UTC +04:00)
Iran's former OPEC governor talks global oil market

TEHRAN, Iran, Nov. 23


An Iranian former oil official said if the supply of oil will be increased by a country like Iran, the countries which replaced Iran`s export in recent years should reduce their export as much.

“Iran's budget for next year could be based on an oil price of $40 a barrel. This goal can be achieved if the global demand for oil will not decrease,” former Iran`s OPEC Governor Mohammad Ali Khatibi said, Trend reports citing ILNA.

“The outbreak of the coronavirus and the imposition of restrictions in various countries, such as quarantine, has reduced demand again,” he said.

He went on to say that the second pre-condition for achieving the budget goal is supply management, i.e reduction of production ceiling, otherwise, the price of oil would be below $ 10 per barrel.

"If demand does not fall below this level, Covid-19 will be controlled, activities will return to normal and the supply will not exceed market demand, the oil prices will remain reasonable," he added.

"If oil exporter countries do not reduce production, there will be an oversupply that will put pressure on prices and lower the price trend again,” he said adding that in which case we should not expect $ 40 oil for next year's budget.

He went on to mention the possible return of Iranian oil to the global market should be answered by a reduction in previous oil exports.

“If Iran or countries like Venezuela and Libya return to normal production and exports, others should reduce production to keep market demand balanced,” he noted.