Iran in talks with OPEC members ahead of Vienna meeting

Business Materials 11 November 2014 11:38 (UTC +04:00)

Tehran, Iran, Nov. 11

By Milad Fashtami - Trend:

Iran is negotiating with four member of the Organization of the Petroleum Exporting Countries (OPEC) to reach an agreement over the global management of oil prices, ahead of the organization's upcoming meeting.

The falling trend of oil prices in the global markets has raised some concerns among the oil-producing countries.

Iranian Oil Minister Bijan Namdar Zangeneh is currently in Qatar to discuss the issue with his counterpart, Iran's Mehr News Agency reported on Nov. 11.

During the visit, Iranian minister submitted President Hassan Rouhasni's message to the Emir of Qatar, Sheikh Tamim bin Hamad bin Khalifa Al Thani.

The message reportedly stresses on the need to increase bilateral trades, especially in the energy sector, as well as the importance of establishing stability in global oil prices.

Iran has previously held successful negotiations with Iraq, Venezuela, and Ecuador in regard to managing global prices.

The 166th (ordinary) OPEC meeting is scheduled to be held on Nov.27 in Vienna. OPEC has twelve member countries.

Iran has decided to sell its crude oil to Asia in November at the biggest discount in almost six years. The decision was made after Saudi Arabia cut prices for all grades and to all regions for November. Qatar and Iraq decreased their prices.

Iran is expected to face a budget deficit in the current Iranian calendar year (to end March 20, 2015), due to the sharp fall in oil prices. Iran's current year budget envisages the price of $100 per barrel of oil. This is while each Iranian oil barrel is currently sold at around $80.

Iran's Mehr news agency reported that this gap will result in $2.5 billion of budget deficit by the end of the year (March 20, 2015).

Based on Iran's budget law, the country is supposed to export 1.4 million barrels of oil (including gas condensate) per day.

Iran is daily earning $18-20 million less than the projected figure.

Iranian President Hassan Rouhani has also predicted that Iran's total oil revenues will be 30 percent less than expected.

Iran's media said on Oct. 17 that Rouhani ordered the Oil Ministry to take measures to prevent falling of oil prices by using diplomatic leverages.