Zanganeh: Using Oil as Weapon Will Harm All Oil Producers

EghtesadOnline: Iran has never been a threat to energy security, nor will it ever pose a risk to it, as insecurity in the region is against its national interests.

News ID: ۷۴۷۸۱۳

09 July 2019

Oil Minister Bijan Namdar Zanganeh made the statement on Sunday in an interview with the state TV, IRNA reported.

Zanganeh made the remark in response to allegations by Saudi Arabia's Energy Minister Khalid al-Falih who called on the international community to stand up to Iran's threats to global energy security.

Insecurity in the Middle East, "politicizing oil and using it as a weapon will harm all oil producing countries I am not excluding Iran", and that would be a lose-lose game, Financial Tribune quoted Zanganeh as saying.

“Amid the current turmoil in the energy market and international relations, it is of high importance for OPEC to retain professionalism and try to remain an apolitical organization.”

According to the Iranian minister, safeguarding regional security is of paramount importance as it is linked to Iran's national interests.

As long as the Persian Gulf is safe, major oil producers will have no concern selling their crude. Moreover, all of them like higher prices, he added.

Zanganeh asserted that he was very hopeful of an improvement in the country’s crude exports, in spite of tightened US sanctions on Tehran’s main source of income. He did not reveal any figures regarding the National Iranian Oil Company's sales.

“I am very hopeful that our oil exports will get better,” the official told state TV, adding that oil price was not Iran’s main concern.

“The amount of oil that we can export is our main concern and not the price,” he added.

Industry sources told Reuters last month that Iranian crude exports had dropped in June to 400,000 barrels per day or less after Washington tightened sanctions on the country’s oil exports in May.

In April 2018, exports stood at more than 2.5 million bpd.

Implacable Foe

Zanganeh blamed Iran’s implacable foe, the United States, for destabilizing the oil market, stressing that Washington was “using oil as a weapon” to pressure Iran.

“Destabilizing the market is in America’s interest ... Cooperation between OPEC members and non-OPEC oil producer states will stabilize the market,” he said.

Washington tightened sanctions from May 2018, ordering all countries and companies to halt imports of Iranian oil, or be banished from the global financial system. It has also dispatched extra troops to the region to counter what it describes as Iranian threats.

Zanganeh believes that imposing sanctions on Iran and Venezuela was a ploy to marginalize two major oil suppliers so that the US could sell its oil, especially shale whose extraction cost has decreased to as low as $40 per barrel.

With more than 12 million barrels a day, the country's output has already exceeded that of Russia and Saudi Arabia.

Suspended Investment

After the United States threatened to impose sanctions on companies that do business in Iran, France’s Total and China National Petroleum Corp suspended investment in Phase 11 of the country’s giant South Pars gas field in the Persian Gulf last year.

Zanganeh said talks are continuing with CNPC.

“They have so far failed to start developing Phase 11 ... China is a friend of Iran and the latter would not opt for severing ties by foot-dragging in projects. We are seeking alternative solutions,” he said.

China is a signatory to the nuclear deal and has condemned Washington’s decision to exit the deal.

Separately, Zanganeh said Iran eyed 300,000 bpd oil production from its West Karoun oilfields in the southwest of the country.

Referring to the country's gasoline output, he said production has surpassed 110 million liters per day for the first time in NIOC's history. Persian Gulf Star Refinery's output has reached 420,000 barrels per day.

“The complex located in Bandar Abbas in Hormozgan Province is also exporting liquefied petroleum gas via land,” he said.