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Iran says 'more than enough' oil on world markets
Madrid (Platts)--2Jul2008
World oil markets are well supplied and there is no need for additional
crude, Iranian oil minister Gholamhossein Nozari said Wednesday.
Speaking to reporters on the sidelines of the World Petroleum Congress in
Madrid, Nozari was asked whether Iran intended to raise its oil production as
Saudi Arabia had done recently.
"We have some spare capacity, but at the same time there is no need for
more supply in the market," he said.
But Nozari expressed concern about the current high prices, which on
Monday soared to new records of $143.91/barrel for North Sea Brent and
$143.67/b for US light crude futures.
"The volatility of prices in the market is not good either for producers
or consumers," he said. "The $140/b we are seeing, part of it is due to the
developing trend of the dollar.... it looks like we have no other choice but
to see high oil prices," he said.
"I believe the price of oil should be based on what the fundamentals of
the market dictate. But nowadays we are not seeing enough demand but more than
enough supply," he said.
"One of the reasons for the high prices is the shortage of investment [in
capacity expansion] for many years," he said.
Nozari expressed concern about the world's ability to maintain enough
spare crude production capacity in the future, lamenting the lack of
sufficient investment in the past.
Asked whether he agreed with the International Energy Agency's prediction
on Tuesday that OPEC's effective spare capacity could fall to as little as 1
million b/d in 2013, Nozari said: "Not investing enough in oil-rich countries
might have this consequence," Nozari said, "especially in the years you refer
to, because many of these countries are going to be net importers."
Nozari downplayed any suggestion of a US or Israeli attack on Iran,
although he said that if attacked, "Iran is not going to be quiet, it is going
to react."
"We don't think the wise people in the world even think of an action like
that," he said.
Nozari did not respond directly when asked whether Iran would stop its
exports if attacked. He said, however, that Iran had always been a reliable
supplier and intended to remain so.
"Iran has been always a reliable supplier to the market and Iran remains
a reliable supplier forever," he said.
The single biggest daily increase in oil prices--nearly $11/barrel--came
last month following reports of possible military action against Iran, OPEC's
second biggest producer after Saudi Arabia, with exports of around 2.7 million
b/d.
Earlier this week, prices soared to new records of $143.91/barrel for
North Sea Brent and $143.67/b for US light crude futures, but were back around
$141.25-141.38/bbl at 1048 GMT on Wednesday.
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