Iran will probably be allowed to keep its oil production unchanged if OPEC decides to extend its six-month agreement on output cuts beyond June, Kuwaiti Oil Minister Issam Almarzooq said.
“I think they will keep the same level if the deal is extended,” Almarzooq, who chairs the committee monitoring the cuts, said Wednesday in an interview in Abu Dhabi. Kuwait was the first country to call for extending the production cuts beyond June. Oil prices will increase as demand improves, chipping away at oil inventories in the second half, he said.
Iran was allowed to increase its output under the deal as the nation rebuilds from international sanctions that crippled its energy industry. Since sanctions were eased in January 2016, Iran’s oil production has climbed 35%, according to data compiled by Bloomberg. It has stabilized this year, gaining less than 2%, the data show. Iran pumped just shy of its 3.8 MMbpd allowed under the deal in the first quarter, according to the International Energy Agency.
“They are not cutting, but they aren’t increasing output from what was agreed on,” Almarzooq said on the sidelines of a conference in the UAE capital. Iran is showing “good cooperation with OPEC” under the deal, he said.
The Organization of Petroleum Exporting Countries will decide at its meeting on May 25 whether to prolong the cuts, Secretary General Mohammad Barkindo said.
It’s too soon to to talk about Iran, Libya and Nigeria joining the cuts if the output reduction agreement is extended beyond June, Barkindo and United Arab Emirates Energy Minister Suhail Al Mazrouei said at the Abu Dhabi conference. Nigeria and Libya were exempt from any obligation to cut as both countries continue to suffer production losses from militant attacks and political instability.