Iran asks OPEC to cut output by 1.3 million bpd

Iran’s Minister of Petroleum Bijan Zangeneh has written to OPEC, calling on the organization to cut its production by 1.3 million barrels a day, the country’s OPEC delegate Mehdi Asali says.

In his letter to OPEC Secretary-General Abdullah al-Badri, the Iranian minister asked the organization to stick to its output ceiling of 30 million barrels per day (bpd), Asali said.

“Currently, the output ceiling has to stand at 30 million bpd but the production has reached about 31.3 million bpd,” Asali said.

“This is while it is clear which countries are producing above their quota…Crude production by certain countries has increased so much that it has surpassed the ceiling,” he added.

Because of overproduction chiefly by Saudi Arabia and non-OPEC producers, there is currently up to 2.5 million bpd of excess oil in the market which has caused crude prices to lose around 60% of their value since mid-2014.

OPEC introduced output ceiling of 30 million bpd in its Dec. 2011 meeting as it scrapped allocating fixed production quotas to member countries. The group, however, has been producing a million more barrels than its ceiling for the past 16 months.

On Saturday, Zangeneh described OPEC’s decision to ditch its individual production quotas as a “historic mistake”, saying members are unlikely to agree on reinstating the system in their next meeting on Dec. 4.

“It is surprising why this plan was ever accepted,” the IRNA news agency quoted him as saying.