MercoPress. South Atlantic News Agency

Iran pushing for oil cut of 1.5 million bpd in Cairo meeting

Iran's OPEC governor, Mohammad Ali Khatibi, is calling on the oil cartel to cut production by a further 1 to 1.5 million barrels per day when it meets in Cairo later this month.

The Organization of Petroleum Exporting Counties decided to cut production by 1.5 million barrels a day last month in response to a dramatic fall in oil prices from a record 147 US dollars in July to below 70 USD last month. The cartel produces about 40% of the world's crude oil. "It is better that, at the meeting in Cairo, it decides to cut output by another 1m to 1.5m barrels so that there is... balance between production and demand," Mr Khatibi was quoted as saying. OPEC is scheduled to hold an extraordinary meeting on November 29 in Egypt. The Iranian official said negotiations with non-Opec producers, like Russia, were necessary because if they increased output, they would "neutralise" any reduction by the organisation. "We believe they will also incur losses from the drop in oil prices therefore it is necessary that they will also cooperate and lower their output," he said. Russia, the biggest non-OPEC oil producer and second-largest oil exporter in the world, is struggling with a stock market crisis that has hit cash reserves built up on the back of an oil price boom. Khatibi warned against oversupply and said that the members violating the cartel's set quotas would push down prices. "OPEC countries should know that they must remain committed to their obligations, otherwise prices will fall even further," he said. "The downward trend of oil prices and an increase in the stockpiles of large industrial countries indicate an oversupply." The cartel, which will also meet as scheduled in Oran, Algeria on December 17, has made it clear that it would consider another output reduction if the price of crude remains below 70 dollars a barrel. "In their latest comments, OPEC members have favoured an oil price of between 70 dollars and 100 dollars a barrel," Khatibi said in an interview broadcast later on state television. "Prices below these figures will trouble oil investment and the production cycle of these countries," he added. "We need non-OPEC members to cooperate with OPEC... and decrease their production somewhat. If they raise production, it merely counteracts the OPEC measure," he said