Since it would be too early to say how fast Iranian output is rising, OPEC is very unlikely to cut output at its next meeting in June, even if prices remain extremely low, said OPEC sources and delegates.
Before taking any further steps to stablize prices, OPEC countries such as Saudi Arabia also want to test Russia's commitment to freezing output, the sources, which include officials from the Middle East say.
In the first global oil pact in 15 years Saudi Arabia, Qatar, Venezuela and non-OPEC Russia agreed last month to freeze output at January levels after more than 18 months after oil prices began a steep slide due to excess supply.
The production freeze was only the first step to balance the market after prices fell to their lowest since 2003, the Saudi Arabian Oil Minister Ali al-Naimi said last week adding that a supply cut was not on the cards.
"Maybe by the end of the year (a cut could be possible) when it is really clear that Iran is actually producing the volumes they are talking about. But not in June," a source from one of OPEC's Middle Eastern producers said.
Iran - OPEC's No.3 producer - is the key supply uncertainty for 2016 as it is raising output after the lifting of Western sanctions in January and is adding barrels to the already saturated market. On the other hand for the world's two top oil exporters – Russia and Saudi Arabia, January was peak or near-peak production months.
Issuing conflicting statements and confounding market skepticism that its fields were damaged by years of sanctions, Iran has been saying since the last month that it could add up to 1.5 million barrels per day over the next year.
As the European buyers were cautious to immediately boost trade amid remaining dollar clearance and ship insurance problems, Iran’s February exports have been disappointing.
"No-one at OPEC knows what's going on with Iranian fields. So the Saudis want to see what happens in reality," a source in one of the OPEC delegations who is familiar with production freeze negotiations, said.
OPEC sources said that in a manner similar to what was done with Iraq in the past when the country was subject of international sanctions, non-OPEC Oman and some OPEC sources have floated an idea of Iran being exempt from output freezes. However no offer for special terms has been made far Tehran.
While Iranian sources say the country would be prepared to discuss a production pact once its output reached the pre-sanctions level, Iranian Oil Minister Bijan Zanganeh said last week the production freeze was "laughable".
While some say that it will take time to understand where real figures stand other analysts believe that the output and exports could rise by a maximum of 0.7 million bpd to around 3.5 million bpd in the next months.
For example, OPEC has been already informed by Iran that in January, it would was pumping as much as 3.4 million bpd in January - a much higher number than estimated by OPEC watchers.
(Source:www.reuters.com)
Before taking any further steps to stablize prices, OPEC countries such as Saudi Arabia also want to test Russia's commitment to freezing output, the sources, which include officials from the Middle East say.
In the first global oil pact in 15 years Saudi Arabia, Qatar, Venezuela and non-OPEC Russia agreed last month to freeze output at January levels after more than 18 months after oil prices began a steep slide due to excess supply.
The production freeze was only the first step to balance the market after prices fell to their lowest since 2003, the Saudi Arabian Oil Minister Ali al-Naimi said last week adding that a supply cut was not on the cards.
"Maybe by the end of the year (a cut could be possible) when it is really clear that Iran is actually producing the volumes they are talking about. But not in June," a source from one of OPEC's Middle Eastern producers said.
Iran - OPEC's No.3 producer - is the key supply uncertainty for 2016 as it is raising output after the lifting of Western sanctions in January and is adding barrels to the already saturated market. On the other hand for the world's two top oil exporters – Russia and Saudi Arabia, January was peak or near-peak production months.
Issuing conflicting statements and confounding market skepticism that its fields were damaged by years of sanctions, Iran has been saying since the last month that it could add up to 1.5 million barrels per day over the next year.
As the European buyers were cautious to immediately boost trade amid remaining dollar clearance and ship insurance problems, Iran’s February exports have been disappointing.
"No-one at OPEC knows what's going on with Iranian fields. So the Saudis want to see what happens in reality," a source in one of the OPEC delegations who is familiar with production freeze negotiations, said.
OPEC sources said that in a manner similar to what was done with Iraq in the past when the country was subject of international sanctions, non-OPEC Oman and some OPEC sources have floated an idea of Iran being exempt from output freezes. However no offer for special terms has been made far Tehran.
While Iranian sources say the country would be prepared to discuss a production pact once its output reached the pre-sanctions level, Iranian Oil Minister Bijan Zanganeh said last week the production freeze was "laughable".
While some say that it will take time to understand where real figures stand other analysts believe that the output and exports could rise by a maximum of 0.7 million bpd to around 3.5 million bpd in the next months.
For example, OPEC has been already informed by Iran that in January, it would was pumping as much as 3.4 million bpd in January - a much higher number than estimated by OPEC watchers.
(Source:www.reuters.com)
