Iran, Venezuela moot oil production cut

08 September 2008

Iran's oil minister, Gholamhossein Nozari and Venezuelan oil minister Rafael Ramirez will ask OPEC members to cut output when they meet on in Vienna tomorrow as the price of oil has fallen from a record level above $147 in July 2008 to as low as $105.46 in the first week of September 2008.

Gholamhossein Nozari told Iranian news agency Shana that Iran would ask for a cut of 1.5 million barrels a day, nearly 5 per cent of the current output, since the market now is over supplied and a continued fall in crude prices would harm producers as the service and engineering costs have risen.

Nozari said that oil prices had dropped by $36, while the oil exporting countries had undergone a 25-30 per cent rise in production costs.

Shana quoted Nozari as having said, ''Under current conditions $100 a barrel for oil is appropriate''

As oil price rose globally, Saudi Arabia-the largest oil producer, started pumping an extra 200,000 barrels per day adding to an earlier 300,000-barrel increase in May.

The price hawks in OPEC, notably Iran and Venezuela, were infuriated by Saudi Arabia's decision to arbitrarily hike production when the rest of OPEC insisted that the market was well-supplied.