Iran clings to current market share of oil

Bloomberg/Fuel Fix:

Iran will protect its share of global crude sales under all circumstances, Oil Minister Bijan Namdar Zanganeh said, as OPEC members prepare to meet next week to review production levels.

The Persian Gulf nation can double oil exports in two months if sanctions against are removed, Zanganeh said, according to the ministry’s news website Shana.

The Organization of Petroleum Exporting Countries will gather on Nov. 27 in Vienna to assess its collective output amid a supply glut and a 30 percent drop in prices this year. Iran’s crude output has languished under international economic sanctions that deter foreign energy investors and limit its exports to approximately 1 million barrels a day.

“Under no circumstance will Iran decrease its share of the global market, not even by one barrel,” Shana cited him as saying.

OPEC producers are stepping up diplomatic visits before their meeting, discussing how to react to the plunge in oil prices to a four-year low. Saudi Arabia, the group’s biggest member, remains committed to seeking stable prices, Saudi Oil Minister Ali Al-Naimi said Nov. 12 in Mexico. Rafael Ramirez, Venezuela’s OPEC representative, visited Algeria, Qatar, Iran and Russia. Zanganeh traveled to the United Arab Emirates, Qatar and Kuwait.

OPEC members Libya, Venezuela and Ecuador have called for action to prevent crude from tumbling further. Brent crude futures added 25 cents to $79.58 a barrel on the ICE Futures Europe exchange in London at 12:42 p.m. Singapore time.

Iran, which produced more than 4 million barrels a day in 2008, lost market share to other producers amid sanctions imposed to curb its nuclear program. It pumped 2.77 million barrels a day in October, according to data compiled by Bloomberg. The nation could boost output by 700,000 barrels a day within two months of the removal of sanctions, Zanganeh told reporters at the last OPEC meeting in Vienna in June.
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Iran would need outside help to increase its production.  Current prices are not enough to balance its budget and it has limited access to outside financing.Venezuela, Ecuador and Russia also have budgeted their expenditures based on a much higher price.  Russia may have some reserves to sustain it for ahile, but it too is facing sanctions that will limit its growth and it has had to sale natural gas at a discount price to China recently.  It is hard to feel sorry for these guys since they have been the beneficiaries of windfall profits for years.