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Tehran, Moscow sound undecided over extension of oil cut deal

September 11, 2017/ 08:38

Tehran - Moscow. Ahead of the Joint OPEC-Non-OPEC Ministerial Monitoring Committee (JMMC) meeting on Sept. 22, Tehran and Moscow appear undecided on further extension of oil cut deal.

Iranian Oil Minister Bijan Namdar Zanganeh earlier this week said there are unofficial talks underway to extend the OPEC agreement on output cuts beyond March 2018, Trend agency reports.

"I think the oil market is balanced. OPEC members’ compliance with output cuts has not fallen in the last six months; it has increased," Zanganeh was quoted by local media as saying on Monday.

Saying that Iran welcomes cooperation between OPEC and non-OPEC members, he further added that cooperation means reducing oil production, but Brazil is very unlikely to agree on output cuts.

In the meantime, Russian Energy Minister Alexander Novak has said that Moscow would consider an extension of the deal if the market is imbalanced and risks occur to the market.

"We see stable prices around $50 [per barrel], less volatility, decreasing inventories. If suddenly ... the market is not balanced and we see a risk for the market, then we will discuss options, including an extension," Novak added.

In an interview with Trend on Friday, Charles Ellinas, CEO of Cyprus-based energy consultancy e-CNHC, downplayed the possibility of an agreement between OPEC and non-OPEC producers on extending the deal.

"I do not expect that OPEC and non-OPEC will agree to increase current cuts, even though Saudi Arabia may support further cuts, but it is unlikely to do it alone. The key countries are happy with prices over $50 per barrel."

Iran’s budget plan for the current fiscal year (starting on March 20) has projected an average oil price of $50 a barrel.

Ellinas suggests there are signs indicating that the oil prices would stand above $50.

"Most in OPEC feel that the oil market is going in the right direction and do not see the need to increase cuts. There are signs that the market is tightening and prices appear to have settled in the $50-$55/b range."

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