Iran offers support for production freeze

Iran’s oil minister Bijan Zanganeh offered his backing to the initiative of the production freeze if that provides price stability. After a meeting with the new OPEC secretary general, Mohammed Barkindo, Iran’s oil minister said, “Iran wants a stable market and therefore any measure that helps the stabilisation of the oil market is supported by Iran…..We support oil prices between $50 and $60 per barrel.” While these comments don’t ensure that Iran would join the production freeze initiative but this conciliatory tone is definitely encouraging at a time when Iran’s close ally Russia has been successful in forming a working group that will study ways to reduce oil price volatility.

The last possibility of a freeze deal ended in April when Saudi Arabia said that it won’t join any such deal as Iran didn’t participate. Iran has been increasing production this year in order to return to its pre-sanction level. Russia has been supporting Iran’s argument that their target is to reach pre-sanctions level.

OPEC members are set to meet informally, later this month in Algeria and looking at the growing sense of urgency among all participation a deal could be very close.

WTI is currently trading at $45 per barrel and Brent at $2.5 per barrel premium.