Opec chief says oil cartel 'not ready' to cut production

JUL 30, 201510:33 PM

[MOSCOW] Opec Secretary-General Abdullah El-Badri said on Thursday the oil producers' cartel is not planning to cut production despite the fall in crude prices over recent months and concerns about the possible addition of Iranian oil in the market.

"We met in December last year and we met in June this year. We decided to keep our production at 30 million barrels a day, the same as before. We are not ready to reduce our production," Mr Badri said after a meeting in Moscow with Russia's energy minister.

Oil prices recently dropped to their lowest levels in months on the back of concerns over a global oversupply.

The fall followed a recovery in prices after a steep slump last year. Prices continued a slight rebound on Thursday following reports of a drop in US stockpiles.

Opec and Russia said in a joint statement after Thursday's talks that indicators pointed to a possible "more balanced situation on the oil market and its stabilisation" in 2016.

Analysts have said that the return of oil from Iran following the landmark nuclear energy deal with world powers this month could create fresh tensions within Opec.

The accord paves the way for the removal of sanctions and the gradual return of Iranian oil to the global market next year.

The Organization of the Petroleum Exporting Countries - whose 12 members including Iran pump one third of global oil - is mindful that Iranian oil could worsen a global supply glut and depress oil prices further.

Mr Badri, however, insisted that Opec welcomed the lifting of sanctions on Iran and would be able to cope with any increased volumes.

"We are really happy that sanctions are on their way to be over for Iran. Now we don't have any country under sanctions in our organisation," he told journalists.

"I think the quantity that is in question, I think our group will accommodate them."

AFP