Time of Iran leaving OPEC quota for Saudi Arabia over

Business Materials 5 December 2015 17:34 (UTC +04:00)

Tehran, Iran, December 5

By Mehdi Sepahvand -- Trend:

This time is going to be different from previous times when Saudi Arabia would take over Iran's share of oil export as Iran was restricted by sanctions, economic analyst Mohammad Sadeqi said.

It is not going to be anything like when Iran lost its daily 800,000 barrels of crude export to the US in 1997 or 730,000 barrels to Europe under sanctions, all of which were overtaken by the opportunist Saudi Arabia, Sadeqi told Trend December 5.

Iran has done enough in condoning Saudi Arabia and it is impossible for Riyadh to keep its output high once Iran boosts production, the expert asserted.

Iranian Oil Minister Bijan Zanganeh has said that Iran plans to boost output by one million barrels a day once free from sanctions.

Zanganeh stressed that OPEC members who used Iran's partial absence from global markets should now decline their output because it is Iran's right to produce at the top of its OPEC quota.

Riyadh shunned away from accepting Iran's demand as Saudi Oil Minister Ali bin Ibrahim Al-Naimi said on December 4 that OPEC members do not need to lower their output to make room for Iran, adding that the global market will absorb the Iranian crude.

On the same day, OPEC announced that it welcomed Iran's return.

Saudi Arabia is making a strategic mistake in producing high and high quantity of crude and selling it cheap because it is sure to suffer the high production costs, Sadeqi stressed.

He added that Saudi Arabia has other costs to cover, such as the cost of war in Syria and Yemen in which Riyadh has engaged.

Also, Saudi officials have put large quantities of liquidity in global markets, therefore they would have to back down, the analyst noted.