New York, June 30 (FinanceEnquiry.com) – Iran, the second-biggest producer of oil, reeling under the Western sanctions has called for an extraordinary Organization of Petroleum Exporting Countries (OPEC) meeting to discuss the disparity between high outputs and low price.
Expressing concern for dropping of oil prices below $100 a barrel, what is considered as critical level, Iranian Oil Minister Rostam Qasemi said, “We have asked the secretary general to set up an extraordinary meeting as prices have become irrational.”
Rostam Qasemi reminded the OPEC members, that they have transgressed the agreement reached at June 14, meeting which fixed the cartel’s overall quota at 30 million barrels however he said, “members’ production has reached 33 million barrels a day.”In the said meeting, the OPEC also agreed that “when the prices go below $100 a barrel, they have reached a critical level,” Qusemi added.
In the light of these developments, Iran would like the OPEC to meet at the earliest possible opportunity instead of scheduled meeting in December, he said.
Iran’s oil exports have come to a standstill after the sanctions have come into effect early this year, now from tomorrow; an EU oil embargo is expected to be imposed. It will prohibit insurance coverage for tankers transporting Iranian oil anywhere in the world.
Market sources say, Tehran has expected prices to soar on account of sanctions, however prices have declined first due to slackened demand on account of the European Union’s debt crisis and sloppy industrial growth in China and also due to unauthorized output by some of the members – Saudi Arabia and Kuwait.
Venezuela an OPEC member is also seeking a limit on oil production to improve the market prices. It is also strongly anti-US, like Iran and is opposing the current spate of high output.
Brent crude is currently quoted at below $100 a barrel than a four-year old high of $128 a barrel in March this year. Meanwhile, Brent North Sea oil for August delivery is quoted at $97.80 a barrel, however all the deliveries are quoted below the $100-a-barrel bench mark set by OPEC.
Iran and Saudi Arabia are opposing each other from grabbing the OPEC’s secretary-general post, whose current holder, Abdullah El-Badri of Libya, plans to quit later this year. Ecuador and Iraq are also in running to get the job for their nominees. The selection is expected to be announced in OPEC’s December meeting.
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