Iran not giving a good chance to Algeria meeting

According to media reports, Iran does not see the chance for an output freeze deal between OPEC and non-OPEC oil producers at the meeting in Algeria this week although some group members expect to solve the matter of the crude oil surplus which has caused oil prices to move down.

Russia and OPEC producers want to rebalance the market to increase their oil exports’ income and ramp up their weakened budgets after oil prices have been cut in half compared to 2014.

Producers have been hoping to reach an agreement regarding an output freeze since the beginning of this year. On the contrary, market watchers are of the opinion that an oil deal will not lead to real output cuts.

According to Reuters, the United Arab Emirates’ energy minister, Suhail bin Mohammed al-Mazroui noted, "For us in the UAE, we are for a decision. We think a freeze will help if it is agreed. We hope that all are going to agree."

However, Iranian Oil Minister Bijan Zanganeh was quoted as saying by oil ministry news service SHANA, “This is an advisory meeting and that’s all we should expect from it,” and also stated, “The talks among OPEC members can be used for the OPEC summit in Vienna in November.”

In the past three months, Iran has maintained production at 3.6 million barrels/day which is close to its production level prior to the implementation of the European sanctions in 2012. Iran had indicated that it aims to increase the country’s output level to 4 million barrels/day. Iran projected to produce approximately 4.1-4.2 million barrels/day prior to the output freeze, according to an OPEC source.

However, some ministers and officials still think that OPEC and non-OPEC members might come to an agreement in Algeria this week.