Saudi Arabia is leading the drive for lower prices, producing oil at full capacity despite a glut in the market.
In a special report, the EIA stated that Iran could release inventories of 30 million barrels of crude onto the market as soon as restrictions are lifted and ramp up production by 700,000 barrels per day by the end of 2016.
OPEC delegates see little chance of the exporting group diverting from its policy of defending market share, although the latest drop in prices is starting to sour the business mood even in Saudi Arabia.
The world’s second largest oil exporter and OPEC ring-leader, Saudi Arabia, however, has not responded to any of the calls for an emergency meeting.
Other OPEC members are also fetching prices below the Brent benchmark due to the crude being a heavier weight or containing more sulfur.
Venezuela and Ecuador are among the OPEC countries that are urging the oil cartel to hold such a meeting. Zanganeh said there has been a request for OPEC members to hold an emergency meeting, but added that all 13 members must agree to do so for it to happen.
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Also, per the Energy Information Administration (EIA), total global liquids inventories are estimated to have grown by 2.3 million barrels per day through the first seven months of 2015. Bloomberg is also looking at refining runs to fall to 94.6% and gas stockpiles to fall by 1 million barrels. Still, the EIA estimates suggest that U.S. crude oil production began to decline in May and June.
Saudi Arabia and some other producers used US-led sanctions against Iran’s oil industry to their advantage to raise output but are refusing to cut production as Tehran plans to return to normal export levels.
As a result, the already weak crude prices came under more pressure as the unit produced around 413,000 barrels of refined petroleum products daily before its closure.
“A decision by one country can not radically change the current trend either”, he said, adding it was logical for Russian Federation to build up output during the period of low oil prices. At the time, Wilson Pastor, the South American country’s former oil minister, said the new contracts “are certainly very favorable for the nation and reasonable for the company”.
OPEC’s Gulf members, relatively wealthy, are better able to cope with low oil prices than the African members, Iran or Venezuela.
While Venezuela’s oil prices averaged around $88.42 past year, they have dropped precipitously, worsening a recession, cash crunch and shortages of basic goods ahead of key parliamentary elections the ruling Socialist Party are forecast to lose.