The global oil market is already in surplus by about 3 million barrels a day, with Saudi Arabia and Iraq responsible for 80 percent of the oversupply in the past six months, Mehdi Asali, Iran’s representative to the Organization of Petroleum Exporting Countries, said.
OPEC could potentially boost crude oil production to 33 million barrels a day, the most ever, after international sanctions are removed against Iran amid a global supply glut, Asali said in an interview with the Shana news agency.
Iran made a “big mistake” when it backed OPEC’s decision in December 2011 to discard individual production quotas, Asali said. That allowed Saudi Arabia, Kuwait and other members to take over Iran’s share which was diminishing because of sanctions, he said.
High supplies in North America and OPEC, lack of demand growth and the strengthening dollar are all cause for the lower oil prices, Asali said.
Iran can boost output by 500,000 barrels a day within one week after sanctions are lifted, Oil Minister Bijan Namdar Zanganeh said earlier this month.
Crude has lost half its value in the past year as U.S. production jumped to the highest level in more than 40 years and Saudi Arabia had record output. Prices collapsed after OPEC decided in November last year to maintain production rather than sacrifice market share.
Brent oil for October settlement was trading at $48.60 a barrel, down 1.2 percent, on Monday.
OPEC pumped 32.1 million barrels a day in July, the 14th consecutive month that the 12-nation group has produced more than its collective target of 30 million barrels. The 12-member group’s all-time high output was 32.8 million barrels set in July 2008, the data shows.