Experts and businessmen alike have said OPEC needs to limit production to control the price of oil to keep prices from continuing to drop while some authorities have continued to say the price will bounce back. 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.
From a peak of $115 in June past year, oil prices dropped to less than $45. Brent was trading above $43 a barrel on Tuesday.
Iran and six world powers agreed a deal in July to curb Tehran’s nuclear programme, but sanctions imposed in 2012 will not be lifted until Iran has complied with all the terms of the pact.
Iran, the world’s fifth largest crude producer, has set aside nearly nothing for oil investments this year because of the drop in prices. “The impact of Iranian oil is definitely bearish to prices”.
Earlier this month, the worldwide Energy Agency said Iran could raise its oil output by as much as 730,000 bpd from current levels fairly quickly after sanctions were removed.
Development phases 15 and 16 of the South Pars field are close to starting production and will be inaugurated by President Hassan Rouhani in October, Iranian Oil Minister, Bijan Zangeneh, said at a news conference, according to Shana news agency.
“When increased exports from Iran begin sometime during the first quarter, it is estimated that during the following months they should be able to boost production by between 500,000 and as high as 1 million barrels per day”.
Relatively wealthy, they can better cope with oil prices that are lower than can Venezuela, Iran or other members in Africa.