Oil prices have been sinking for months, and the huge losses on the Chinese stock exchange Monday, triggered by global sell-offs and the devaluation of the yuan, led to further concerns Chinese demand for oil was slowing and production needed to be capped.
Iran’s Oil Minister, Bijan Zanganeh, said on Sunday that holding an emergency OPEC meeting may be “effective” in stabilising the oil price, Iran’s oil ministry news agency Shana reported. Oil producers such as BP Plc and Royal Dutch Shell Plc have expressed interest in developing Iran’s reserves, the world’s fourth-biggest, when sanctions are removed following last month’s nuclear agreement with world powers.
Zanganeh told a group of reporters in Iran’s capital of Tehran that Iran endorsed having an emergency meeting of OPEC.
The country’s annual production is estimated to be about 2.8 million barrels per day (bpd).
As oil prices sank Monday to a six-year low, with Brent crude oil falling almost 6 percent to less than $45 per barrel, economists, financial analysts and Saudi Arabian businessmen said it was time for OPEC to reduce production to stabilize the price of oil.
Algeria said earlier this month that the Organisation of Petroleum Exporting Countries could hold an emergency meeting to discuss the drop in oil prices but other OPEC delegates said no meeting was planned.
OPEC is pumping at near record levels, even amid a global glut of crude.
Ole Sloth Hansen, Head of Commodity Strategy, Saxo Bank said Iran has made it very clear that when sanctions are lifted they want to reclaim the market share that has been lost to other Opec members since 2012. Iran pumped 2.85 million barrels a day in July, down from 3.6 million at the end of 2011, data compiled by Bloomberg show.