Iran rules out raising crude output soon

Ammar Zaidi

Madrid, Jul 2 (PTI) Iran, the second largest exporter
among oil cartel Organisation of Petroleum Exporting Countries
(O.P.E.C.), Wednesday ruled out increasing the output
immediately to cool record high prices but said current rates
were not good for both consumers and producers.
"We have some spare capacity in oil production. At the
same time we have to say that there is no need for more
supplies to the market," Iranian Oil Minister Gholamhossein
Nozari told reporters on the sidelines of the 19th World
Petroleum Congress here.
Record rates at USD 142 a barrel have forced countries
like India to raise fuel price, which is spurting their
domestic inflation.
India, faced with 13-year high inflation of 11.42
percent after raising petrol and diesel prices by Rs 5 and Rs
3 a litre last month, has been seeking a hike in output by
O.P.E.C. to cool the crude prices.
"If there is going to be any need in the market, we
surely are going to contribute to that, Nozari said. Iran has
a production capacity of 4.35 million barrels per day.
Commenting on the current level of crude prices, he said
high prices are "not good for consumers or producers. We as
producers want sustainable markets".
Nozari said high oil prices were a result of devaluation
of US dollar and if it continues like this, we have no other
choice but high prices.
"I believe prices should be based on market fundamentals,
he said.
Tehran is seeking international help to develop its crude
reserves as it sets out on an ambitious plan to raise oil
output to 5.3 billion barrels a day by 2014.
Out of Iran's 700 billion barrels of liquid hydrocarbons
in place, 138 billion barrels can be recovered, Nozari said in
his speech at World Petroleum Congress. "International
co-operation is required for enhancement, because the energy
industry is a multilateral inter-related industry."
Iran has also plans to triple its gas production by 2014.
When asked about the Israeli threat to strike at Iranian
nuclear facilities, Nozari evaded a direct reply on his
country using oil as a weapon.
"Iran has always been a reliable source of supplies to
the market and Iran will remain a reliable supplier for ever,"
he said.
"First of all, Iran is a very, very big country. If there
is any kind of activity (Iran) is going to react fiercely,
Nozari said but quickly discounted an Israeli action by saying
"we do not think wise people can even think of any action like
that".
A mere statement by Israel caused huge volatility in the
markets and so "if any action happens in any part of that
region where major oil comes from, one can imagine what can
happen to the markets. Can any wise person think of any such
action?", he said.
Asked about Iran's reported instance of forming an
O.P.E.C. kind of body for gas producing countries, he said
Tehran had never advocated any cartel and only technological
advancement and experiences were being sought to be shared
through a forum of gas exporting countries.