EghtesadOnline: The letter of association drawn up to clarify the terms of cooperation between OPEC and non-OPEC members is not binding and will not impact the half-a-century old organization.
Oil Minister Bijan Namdar Zanganeh made the statement to CNN on the sidelines of the 176th OPEC meeting held in Vienna, Austria, on Monday, Shana, the Oil Ministry's news portal, reported.
Oil gained on Tuesday as OPEC agreed to extend supply cuts until next March, although prices were pressured by worries demand could ease amid hints of a slowdown in the global economy.
"Decision should be first made by OPEC members unanimously and then be presented to non-OPEC members for the final approval," Financial Tribune quoted Zanganeh as saying.
"I have no worries about the organization's future, if all the main players collaborate closely."
Describing the meeting as constructive, the Iranian oil minister noted that his country reached its intended goals to safeguard national interests. He did not elaborate.
Zanganeh suggested on Tuesday that OPEC+ may need to make deeper oil-output cuts than the current 1.2 million barrels a day at some point, as it continues to lose market share to US shale.
Iran itself—subjected to American sanctions—is working “day and night” to find ways to export its crude, Zanganeh said in a Bloomberg Television interview in Vienna.
OPEC and its allies led by Russia agreed to extend oil output cuts until March 2020 on Tuesday seeking to prop up the price of crude as the global economy weakens and US production soars.
The alliance, known as OPEC+, has been reducing oil supply since 2017 to prevent prices from sliding amid increasing competition from the United States, which has overtaken Russia and Saudi Arabia to become the world’s top producer.
Brent crude futures for September delivery were trading up 17 cents, or 0.3%, at $65.23 a barrel, after earlier falling to $64.66, Reuters reported.
US crude futures for August were up 9 cents at $59.18 a barrel, after touching their highest in over five weeks on Monday.
“OPEC sticking to their production curbs ... will continue to support oil prices as it remains the primary mechanism for the delicate task of keeping the market equilibrium intact,” said Stephen Innes, managing partner at Vanguard Markets, in Bangkok.
The organization agreed on Monday to extend oil supply cuts until March 2020, as the group’s members overcame differences to try to prop up the crude price.
OPEC was expected to meet with Russia and other producers, an alliance known as OPEC+, later on Tuesday to discuss supply cuts amid surging US output.
Russian President Vladimir Putin said on Saturday he had agreed with Saudi Arabia to extend global output cuts until December 2019 or March 2020.
Russia reduced oil production in June by more than the amount agreed in a global deal to cut output, the country’s energy minister and industry sources said on Monday, as the sector felt the impact of a contaminated crude crisis that crippled exports.
US crude oil stockpiles were seen falling for a third consecutive week, a preliminary Reuters poll showed on Monday, also supporting prices.
“With back-to-back weekly inventory draws, I think we are starting to see some strategic buying, thinking we will get another draw,” Innes added.
While US producers hit a monthly record of 12.16 million barrels per day in April, according to data, new US shale oil production is expected to slip this year from last year, according to a survey of major forecasters.
Still, concerns of a weaker global economy denting oil demand capped price gains.