Iran calls for OPEC production quotas as cartel mulls output levels

The Organization of the Petroleum Exporting Countries (OPEC) should set production quotas for individual members, Iran demanded Thursday at a meeting of the cartel, highlighting divisions over the group's production strategy.

Some Arab members of OPEC would like to restart a discussion on freezing output at current levels to ramp up prices, but Iran has been calling for a special quota for its production, arguing that it currently needs to increase exports since nuclear-related sanctions have been lifted.

"A ceiling without country quotas is meaningless," Tehran's Petroleum Minister Bijan Namdar Zangeneh told reporters minutes before a meeting with his OPEC colleagues in Vienna.

Venezuelan Petroleum Minister Eugenio Del Pino backed up Tehran's position by speaking out against a freeze and stressing that Iran should have the opportunity to fully return to oil markets.

Led by Saudi Arabia, Gulf countries first attempted to negotiate a freeze in April together with non-OPEC member Russia, but the effort failed due to opposition from Iran.

Nigerian Oil Minister Emmanuel Ibe Kachikwu acknowledged that OPEC currently has little power to influence markets by adding or removing oil barrels.

"Obviously we want the price to do better, but we have come to see that OPEC does not have the capacity to be the swing producer it was in the past," he said.

Oil prices remained nearly unchanged Wednesday. The benchmark price for European Brent oil traded at 49.82 dollars per barrel.

Prices have risen sharply since the start of the year owing to production outages in Nigeria and Canada, but some OPEC members feel that they are still so low that companies are holding off investments in oil fields, putting long-term supplies at risk.

OPEC members were expected to elect a new secretary general Thursday to succeed long-time incumbent Abdalla Salem El-Badri.

Nigeria, Indonesia and Venezuela have fielded candidates.

Nigeria's Mohammed Barkindo is seen as the front-runner by analysts, given that he has headed the state-owned Nigerian National Petroleum Corporation and served as acting secretary general of OPEC in 2006.

"We are very optimistic," Nigeria's Kachikwu said.

The other two candidates are Mahendra Siregar, a former Indonesian deputy finance minister and Venezuela's former energy minister Ali Rodriguez.

If countries cannot agree on a name, they could appoint a chief on a rotational basis among member states, OPEC ministers announced late last year.

However, OPEC's policies are not set by the secretary general or the Vienna secretariat, but by its member states.

The cartel's production accounts for a third of global oil exports.

Last update: Thu, 02/06/2016 - 12:53

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