IRAN VOWS REVENGE FOR SANCTIONS — It will not cut production

[Chevil]

​

Oil prices are tumbling because the agreement between Saudi Arabia, Russia, Qatar, and Venezuela to freeze oil production at January levels looks like it is going to have little effect.

Basically, the markets would be happier if Saudi Arabia promised to cut — not freeze — production, and if Iran and Iraq joined the countries in pledging to put their output levels on ice.

However, it looks like that won't happen anytime soon judging by comments made by Iran’s OPEC envoy, Mehdi Asali, to the Iranian daily newspaper Shargh.

“Asking Iran to freeze its oil production level is illogical … when Iran was under sanctions, some countries raised their output and they caused the drop in oil prices,” said Asali, as cited by Reuters and the BBC. “How can they expect Iran to cooperate now and pay the price?”

Iran has only just had its sanctions lifted and it is not looking at reducing the amount it can produce while it is trying to rebuild its battered economy with lucrative oil reserves. Oil production constitutes 23% of Iran's wealth, according to Trading Economics. There is no love lost between Iran and the Saudis. And the Iranians are going to put their own economy before the interests of the Russians and the Venezuelans.

So refusing to join in the freeze is basically Iran saying "screw you!" to the oil world.

Crude oil prices are currently at below $30 per barrel. That's a massive drop from the $100-plus highs of the summer of 2014. Analysts believe that the deal between Saudi Arabia, Russia, Qatar, and Venezuela is only prolonging the pain of low prices. The only benefit it brings is the promise of not making things even worse.

ReutersIn fact, the International Energy Agency said in its latest oil market report that OPEC members pumped out 280,000 more barrels every day in January than in December, helped largely by Iran's re-entry into the global markets after the lifting of sanctions that month.

Since then, Iran has increased production by 80,000 barrels a day to 2.99 million, the IEA says.

Julia Sturgeon and her team at Macquarie released a research note on Wednesday morning saying how integral Iran is to an oil price recovery:

The deal is contingent on a broader agreement among OPEC members, and we do not expect Iran to agree to the deal as it stands. In our view, there would need to be a concession for Iran to allow for some recovery towards production at pre-sanction levels.

On Tuesday, Capital Economics Middle East economist Jason Tuvey argued in a note to clients that an "output freeze [is] not a game-changer for the Gulf economies." Production from Russia, Qatar, and Venezuela wasn't expected to rise much anyway, and Iraq and Iran are not mentioned in this agreement.

ReutersAccording to Barclays analysts Miswin Mahesh and Kevin Norrish, Iranian exports are already inching higher after the removal of sanctions (though exports are still below pre-sanction levels), and comments from Iran's vice president suggest that the country's exports have expanded to 1.3 million barrels a day and are expected to reach 1.5 million barrels a day around March 20.

Jonathan Aronson and his team at Credit Suisse also point out that "naysayers" see oil prices tumbling further (emphasis ours):

In this view, a freeze of production is not a 'confidence builder' but an admission that despite the historic collapse of oil prices the sovereign producers cannot find enough common ground. For instance, Iran reiterated that it intends to grow its output back to pre-sanctions level.

So really, Iran has suddenly regained a lot of its power in the world, and isn't inclined to hold back.

IRAN VOWS REVENGE FOR SANCTIONS — It will not cut production - Yahoo Finance UK

 

[C130]

wow way to throw a friend under the bus

do you know how hard Venezuela been campaigning to get oil prices back up

 

[Chevil]

wow way to throw a friend under the bus

do you know how hard Venezuela been campaigning to get oil prices back up

They threw us under a TRAIN and now we don't care anymore ...

 

[AmirPatriot]

wow way to throw a friend under the bus


do you know how hard Venezuela been campaigning to get oil prices back up

Its not Iran's responsibility to cut production. Iran has been under sanctions for years, prices went up, and the other OPEC countries upped production to get as much dough as possible. Now that sanctions are lifted Iran must lift production in order to regain its rightful market share. If the other nations don't want to cut output, so be it, they're just hurting themselves more until they are forced to do so.

 

[randomradio]

Yeah! Go, Iran!

This benefits importers a lot.

 

[somebozo]

Yeah..with two largest producers Saudi and Russia agreed on production freeze..Iranian attempt to further crash the market will be seen as a nuisance...and it will have to be compensated either by increased exports from Russia...or alienation of Iran.

Its not Iran's responsibility to cut production. Iran has been under sanctions for years, prices went up, and the other OPEC countries upped production to get as much dough as possible. Now that sanctions are lifted Iran must lift production in order to regain its rightful market share. If the other nations don't want to cut output, so be it, they're just hurting themselves more until they are forced to do so.

Blame this on your foolish mullahs who were busy running the atomic program during the oil boom time...and now they lost the window of opportunity!

 

[haman10]

Yeah..with two largest producers Saudi and Russia agreed on production freeze..Iranian attempt to further crash the market will be seen as a nuisance...and it will have to be compensated either by increased exports from Russia...or alienation of Iran.



Blame this on your foolish mullahs who were busy running the atomic program during the oil boom time...and now they lost the window of opportunity!

You really need to give it a rest. Have fun man. Enjoy life. Embrace it with your soul

You'll only get one shot at this and you're wasting it

 

[mb444]

How does Iran continue to produce or raising the rate of oil production help it.... All it would mean is that that price would continue to fall.... Iran can not build any reserves or earn much in a falling market .... Stupid idiotic article.

The fall in global demand for oil is due to the Chinese economic slowdown .... In the foreseeable future nothing much is going to change and no one is going to picking up the slack.

For economies like Saudi and Iran which are totally dependent on oil it is probably better to collude although in OPEC Iran will have to play second fiddle to Saudi.

It's good for the rest of us.... Hope the oil producers continue to be disunited.... Cheap oil prices for all

 

[randomradio]

How does Iran continue to produce or raising the rate of oil production help it.... All it would mean is that that price would continue to fall.... Iran can not build any reserves or earn much in a falling market .... Stupid idiotic article.

The fall in global demand for oil is due to the Chinese economic slowdown .... In the foreseeable future nothing much is going to change and no one is going to picking up the slack.

For economies like Saudi and Iran which are totally dependent on oil it is probably better to collude although in OPEC Iran will have to play second fiddle to Saudi.

It's good for the rest of us.... Hope the oil producers continue to be disunited.... Cheap oil prices for all

Iran is not entirely dependent on its oil economy for growth. It has a very diverse economy. They need to raise production for exports anyway. Their current rate of production is only geared for domestic consumption.

Even if oil production is frozen by OPEC and non-OPEC members, supply still exceeds demand. So the low prices will continue.

 

[HAIDER]

Yeah..with two largest producers Saudi and Russia agreed on production freeze..Iranian attempt to further crash the market will be seen as a nuisance...and it will have to be compensated either by increased exports from Russia...or alienation of Iran.



Blame this on your foolish mullahs who were busy running the atomic program during the oil boom time...and now they lost the window of opportunity!

Good for Pakistan. I am wishing for 18 dollar a barrel. Keep pumping up guys.

 

[libertycall]

Good for Pakistan. I am wishing for 18 dollar a barrel. Keep pumping up guys.

Suddenly Iran became a nuisance to Putin's plans to create chaos and a higher oil price...

 

[Echo_419]

You really need to give it a rest. Have fun man. Enjoy life. Embrace it with your soul

You'll only get one shot at this and you're wasting it

GO IRAN GO

 

[deckingraj]

Good for Pakistan. I am wishing for 18 dollar a barrel. Keep pumping up guys.

in long run it will bring in a glut and we all will be hit...keep in mind it is eroding the spending powers of oil producers and with slowdown in China we are all staring at yet another recession....

 

[AmirPatriot]

Yeah..with two largest producers Saudi and Russia agreed on production freeze..Iranian attempt to further crash the market will be seen as a nuisance...and it will have to be compensated either by increased exports from Russia...or alienation of Iran.



Blame this on your foolish mullahs who were busy running the atomic program during the oil boom time...and now they lost the window of opportunity!

You Saudi shill... you can't shut up can you?

But don't worry. I have a very useful infographic for you. It will help solve all your problems.

Look at that very carefully.

 

[Brahmaputra Mail]

Good. This move should drive the oil prices down.