Iran: Won't Stockpile Oil To Deter OPEC Cheaters
NEW YORK (Dow Jones)-- Iran has categorically ruled out the idea of
creating a floating stockpile of crude oil to be used to deter cheating
on output-restraint agreements by other members of OPEC, a senior Iranian
official said Thursday.
H. Ghanimifard, director of international affairs at the state-owned
National Iranian Oil Corp., also said in statement that Iran was calling
for compliance with the current OPEC pact "at least until March 2000."
The statement came in response to published comments that Iran was planning
to build such a stockpile.
Dow Jones' Energy Matters column Wednesday called such a move "ill-advised"
and said oil prices would fall if reports emerged that Iran was boosting
oil output to create such a stockpile. The column quoted a source at an
OPEC state oil
company expressing concern on the matter, saying "everyone wants
to know what they're really up to." Ghanimifard, who is in charge
of marketing of crude oil and products at NIOC, said in the statement:
"the NIOC categorically rules out any notion of establishing oil storage
at sea with the aim of deterring violations from the latest OPEC accord.
"The Islamic Republic of Iran expressly doesn't endorse such a
policy. We call for compliance with the recent OPEC pact at least until
In agreements reached in 1998 and in March of this year, members of
the Organization of Petroleum Exporting Counties and
some non-OPEC oil exporters have agreed to cut supplies to the market
by about 5 million barrels a day in order to lift prices from 12-year lows.
The current OPEC accord runs through March 2000. OPEC next meets Sept.
22 in Vienna, and it's widely expected that ministers won't make any changes
to the current pact.
Iran 's support of the pact "at least until March 2000" echoes
a joint statement issued earlier Thursday from the oil ministers of Algeria
"In view of the fact that oil stocks are still high...all OPEC
member countries should strictly continue to abide by their production
allocations as a prerequisite for market stability and continuation of
price improvement," the statement from these two ministers said. Algeria's
Oil Minister, Yousef Yousfi, also serves as the current OPEC president.
Last Friday, OPEC's Ministerial Monitoring Subcommittee, which is led
by Iranian Oil Minister Bijan Namdar Zangeneh, after reviewing the market,
issued a statement calling for compliance with output-restraint accords
at least through March 2000.
The subcommittee also noted that the price of the basket of seven crudes
tracked by OPEC is averaging below $14 a barrel this year, which is below
the 1997 average level of $18.68.
In the latest week, the OPEC basket averaged $18.90, compared with $11.08
in the first quarter and $15.38 in the second quarter.