OPEC states must work for stable oil market: Iranian President Hassan Rouhani

Iranian President Hassan Rouhani

Iranian President Hassan Rouhani says all member states of the Organization of the Petroleum Exporting Countries (OPEC) must make joint efforts to stabilize the global oil market and reverse a slump in prices following their landmark supply-cut deal.

In a telephone conversation with Venezuela’s President Nicolas Maduro on Thursday, Rouhani said Tehran and Caracas have held extensive consultations with the purpose of restoring stability to the oil market and lifting crude prices.

He pointed to the agreements reached during OPEC meetings in Algiers and Vienna this year, saying all oil-producing countries should work to pave the way for their implementation.

OPEC members agreed during their extraordinary meeting in Algiers, Algeria, late in September to limit production in an effort to raise the low crude prices. They decided to cut production by 750,000 barrels a day.

Iran, however, has been exempted from the decision because of its exceptional situation of having been under sanctions for a number of years.

During their meeting in Vienna on November 30, OPEC members agreed to slash production by 1.2 million barrels per day (bpd) in the first half of 2017 but exempted Iran from any production cuts – what the country had insisted on since Saudi Arabia raised the OPEC production cut proposal earlier this year.

The ministers of the Organization of the Petroleum Exporting Countries attend a meeting at the OPEC headquarters in Vienna, Austria, on November 30, 2016. (Photo by AFP)

OPEC – in its first production deal in eight years - even agreed to allow Iran to increase its crude oil production by 90,000 bpd, becoming the only OPEC member to boost production under the deal.

Since the removal of nuclear-related sanctions targeting its oil industry in January, Iran - OPEC’s third largest producer after Saudi Arabia and Iraq - has been boosting production in order to reach previous levels and has rejected as unfair calls on the country to freeze production.

The Iranian president further said Tehran remains resolved to support stabilization of the oil market and a surge in prices, adding that non-OPEC members also play a significant role in successfully implementing the agreements.

“Close cooperation among OPEC and non-OPEC countries is key to stabilizing the oil prices and their increase,” Rouhani stated.

The Venezuelan president, for his part, said OPEC members must not allow oil brokers to determine the prices.

Maduro called for Tehran-Caracas cooperation to bring the prices to a real and fair level.

He also praised the Vienna agreement as a victory for all OPEC members.

Crude oil prices have soared by around 15 percent since the November 30 OPEC supply-cut deal.

Non-OPEC nations are expected to contribute to a reduction of 600,000 barrels per day as part of the wider agreement.