Libya official calls for OPEC output cut to make room for Iran

MAHER CHMAYTELLI

VIENNA (Bloomberg) -- The Organization of Petroleum Exporting Countries should reduce crude production by at least 800,000 bpd in order to make room for a possible lifting of oil sanctions on Iran, a Libyan official said Thursday.

“I personally disagree with the presently adopted strategy of keeping high production levels in favor of maintaining market share,” Samir Kamal, the Libyan Oil Ministry’s director of planning and the nation’s governor for OPEC, said in an emailed response to questions about OPEC’s next meeting in June. “OPEC countries should cut production by at least 800,000, in an attempt to stabilize the market and make room for the expected production increase from Iran.”

Iran reached a preliminary agreement with the U.S. and five other world powers on April 2, building toward a full accord by June 30 that would ease economic sanctions in return for curtailment of its nuclear program. The Middle Eastern nation could increase production by 800,000 bopd to its full capacity of 3.6 MMbopd within three months of sanctions being lifted, the Paris-based International Energy Agency said on Feb. 10.

OPEC decided to maintain output at 30 MMbopd in November after four Gulf Arab states, who wanted to preserve market share in the face of rising U.S. shale oil, prevailed over members who wanted to cut production to support prices.

Saudi Arabia, OPEC’s largest producer and the leader of the four-nation bloc, increased oil output in March to the highest in at least 12 years, according to Oil Minister Ali Al-Naimi. The kingdom will keep pumping around 10 MMbopd and will seek to retain its share of the global oil market, he said at a conference in Riyadh April 7.