Published: Thu, June 22, 2017
Economy | By Melissa Porter

Iran oil minister says OPEC considering deeper output cuts

Iran's oil minister said it was too early to consider extraordinary action even as oil prices lose sight of $50 per barrel.

Iran oil minister Zanganeh said today that talks have begun about further cuts.

Compliance with an agreement by the Organization of the Petroleum Exporting Countries and other producers to cut output by 1.8 million barrels per day from January reached its highest in May since the curbs were agreed past year.

The reason for the discussion is an increase in the levels of U.S production which OPEC members had not predicted, Zanganeh said. However, he said it would be hard to prepare the member states for any collective action on such issues.

A dozen non-members led by top oil producer Russian Federation, which reduced output in tandem with OPEC, would also join the scheme.

The cuts would lower the collective production of producers by 1.8 million barrels per day (mb/d).

Iran would also be allowed to keep its oil production by 3.8 mb/d over the next nine months. Economists with Societe Generale said in December, the month before the deal was implemented, that Russian Federation had a poor track record when it comes to managed declines, but noted the personal investment in the cut from President Vladimir Putin was indicative of a willingness to cooperate.

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