Iran raised oil output to preserve market share

by The Associated Press

Iran has raised its oil output as part of the March 29 decision to increase production by the Organization of Petroleum Exporting Countries to preserve its market share, the oil minister said April 3.

“Iran has increased production since April 1. We will not let anyone take up any of our market share,” Oil Minister Bijan Namdar Zangeneh told reporters. He would not say by how much production was raised.

Iran had at first refused to join other OPEC members in an agreement to increase oil production, but reversed course, saying it will pump more to keep other producers from taking away its market share.

Its initial refusal came as a protest against U.S. pressure on the group, but commercial concerns won out over political posturing. Nonetheless, Iran criticized Washington’s involvement again April 3.

“It was bad that the United States put pressure on OPEC. But they will not be able to continue this trend because OPEC members are independent countries and will not accept more pressure,” Zangeneh told reporters.

Zangeneh also said that Iran would be satisfied to see the price of OPEC basket hovering around $25 a barrel. Iran would have preferred the cuts to come in several stages and not all at once, he added.

OPEC members, excluding Iran and Iraq, agreed to increase their total production by 1.452 million barrels per day as of April 1.

Iran would have been entitled to a 264,000 barrels per day increase had it signed the March 29 agreement.

Iran is OPEC’s second-largest producer, after Saudi Arabia. If Iran increases production on the same scale as its OPEC peers, the cartel would boost total output by 1.7 million barrels a day — more than 7 percent above the ceiling it set for itself in March.

The administration of U.S. President Bill Clinton had been lobbying for an increase of 2 million to 2.5 million barrels a day in order to trim gasoline prices.

Clinton said lower oil prices would help sustain economic growth in the United States and throughout the world.