Iran Wants to Extend Production-Cut Agreement

Iran Wants to Extend Production-Cut Agreement

Iran favors an extension to the production-cut agreement between OPEC and some other, non-OPEC oil producers until the end of 2018, an Iranian official told Bloomberg.

“We are pleased with the way OPEC has decided to cut production in order to bring a semblance of balance between supply and demand,” the Deputy Minister for Trade and International Affairs for Iran’s Oil Ministry, Amir Zamaninia, told Bloomberg, adding that “[w]e think this trend will continue and we will support this trend.”

Iran is currently exceeding its production quota under the agreement. Per the agreement, Iran is permitted to produce 3.797 million barrels per day (b/d) of crude, but it is currently producing 3.8 to 3.9 million b/d, Bloomberg reports.

The government plans to increase production to 4.7 million b/d by 2012, Zamaninia said at a conference in London earlier this week, Bloomberg reports.

Iranian officials have previously called for the inclusion of Nigeria and Libya, two OPEC members exempted from cuts, in the agreement.

In January, OPEC and a group of non-OPEC oil producers agreed to cut oil production by 1.8 million b/d to draw down global crude supply. The agreement was later extended to March 2018 and some signatories have expressed interest in extending it further.

Saudi Arabia and Angola are the only two OPEC members to have met their production-reduction commitments for the entirety of the agreement, Bloomberg reports.

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