LONDON/DUBAI Iran, boosting oil exports after the lifting of sanctions, is talking of a need to recoup its market share, making the OPEC member a challenge to any deal among producers to fix a supply glut, OPEC sources said on Thursday.
Russian officials have decided they should talk to Saudi Arabia and other OPEC countries about output cuts, the head of Russia's pipeline monopoly said on Wednesday, hinting Moscow may be softening its steadfast refusal to cooperate over supplies.
The prospect of supply restraint by the Organization of the Petroleum Exporting Countries and rivals has boosted oil prices to almost $36 a barrel from a 12-year low close to $27 last week, despite widespread scepticism that a deal will happen.
Iran wants to recover its position as OPEC's second-largest producer behind Saudi Arabia, which it lost in 2012 to Iraq when sanctions over its nuclear work forced Tehran to cut exports. Now, the recovery of market share is central, sources say.
"Because of the international sanctions, we lost 1.1 million barrels per day of our exports. So we have to go back to our share of the market," a source familiar with Iranian thinking said on Thursday.
With sanctions lifted this month, Iran says it is increasing its oil output by 500,000 barrels per day (bpd) and boosting exports, a plan that other OPEC sources say makes any global cut agreement harder.
"Any deal is difficult to reach," said a non-Iranian OPEC source, who added Iran would need to keep output flat or raise it by, say, 100,000 bpd "since higher prices would mean more revenue without the need to raise production. But I doubt it, really."
OPEC officials are holding bilateral talks aimed at persuading Russia to participate in cuts alongside OPEC and for Iran to soften its position, industry sources say.
Venezuela and Algeria are among those holding these conversations, sources say. Russian Energy Minister Alexander Novak said on Thursday OPEC was trying to organise a meeting with other producers next month. No date has been set yet.
Iranian Oil Minister Bijan Zanganeh, attending a Franco-Iranian summit in Paris on Thursday, said Iran had not been contacted by Russia about any cuts in output.
It is too early to say whether a deal will occur or whether Iran's position would scupper any agreement. Some of OPEC's Gulf members, in any case, are not overly concerned by the extra barrels from Iran.
United Arab Emirates Energy Minister Suhail bin Mohammed al-Mazroui said on Wednesday the glut would decrease even if Iran boosted output by 500,000 bpd due to expected growth in global demand of at least 1.3 million bpd.
(Additional reporting by Bate Felix in Paris; Editing by Dale Hudson)
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Published Date: Jan 29, 2016 00:30 AM | Updated Date: Jan 29, 2016 00:30 AM