Oil producers need solidarity to safeguard mutual interests: Daily

Tehran, Dec 14, IRNA - 'Iran Daily' on Sunday expressed concern on the continuing downward trend in global oil markets, suggesting solidarity among oil producers as the only way to safeguard their mutual interests. The English-language paper was referring to the oil prices which have now fallen to $65 per barrel in global oil markets, with experts predicting that the prices could further slip to $50 in the near future. The Iranian government has assumed oil prices of $70 in its budget bill for the fiscal year starting March 21, 2015. This is expected to create some problems, as the clouds of budget deficit loom on the horizon, noted the daily in its Opinion column, (pg 4). Crude was sold at over $110 a few months ago, but began to tumble due to a number reasons, including Saudi Arabia’s move to sell oil at much lower price, a significant increase in oil and gas production, a decline in economic growth in energy-hungry countries like Japan, China, Brazil and European states, as well as the rise in the US dollar’s value against other currencies, it noted. The downward trend prompted Oil Minister Bijan Namdar Zanganeh to call for an emergency meeting of OPEC. Zanganeh believes OPEC members should hold an urgent meeting if oil prices continue to plummet. He says the oil-producing bloc should take appropriate measures to make the prices real. The remarks come as Saudi Arabia, the main troublemaker in the oil market, is selling its crude at special discount rates to Asian customers. Iraq, another OPEC member and its second oil producer, has followed suit. Analysts believe their moves have fueled the war for market share and predict that prices will soon drop under $60. It seems that Saudi Arabia and its Persian Gulf Arab allies have prepared themselves for the lowest crude prices in recent years. However, this is going to have significant impacts on the economies of oil-producing countries, believes the daily. Oil prices began to decline in June. Observers say if OPEC fails to take serious action to reduce its output, oil prices will keep up with its freefall. The oil-producing bloc, which supplies one-third of the world’s crude, decided in its last meeting in Vienna to maintain its production ceiling of 30 million barrels per day. The US shale oil has now become a serious rival of OPEC, but that’s very unlikely to challenge the latter’s oil market dominance, wrote the paper in conclusion./end