Iran, Saudi in oil price war
May 11, 2016, 11:45 am

Iranian President Rouhani has made revitalization of the oil industry after sanctions were removed a central strategy of his government [Xinhua]

Iran on Wednesday blamed its biggest rival Saudi Arabia for the “collapse” of the recent Doha talks on capping oil output but the Kingdom appeared to shrug off the allegation and instead said it would boost production in 2016.

Iran, which did not attend the talks amid a diplomatic row and continuing Middle East proxy wars with Saudi Arabia, also said it would not curb its oil production.

Earlier this week, Iran announced that it increased its output to pre-sanctions levels, fulfilling its 2015 pledge to boost production by as much as 1.1 million barrels a day.

Iranian President Rouhani says his country is pumping as much as 2.5 million barrels a day.

And in a move that is likely to anger the Saudis and spark a regional price war, Iran announced yesterday that it would once again cut the price of its oil exports – with Asia proving to be a lucrative market.

Iran’s Oil Minister Bijan Namdar Zanganeh justified the price cut by saying that the Saudis had been the ones to undercut their own pricing regimen in a bid to draw oil markets away from Iranian crude.

He added that Iran’s oil ministry was planning to boost production eventually to four million barrels a day and that his country would no longer entertain the idea of talks to curb production.

Oil prices retracted slightly on Wednesday: US benchmark West Texas Intermediate was down just under one per cent to $44.23 a barrel at press time.

International benchmark Brent Crude was down 0.53 per cent to $45.28.

Meanwhile, Saudi Arabia said that it would boost production in 2016 through its Shaybah oil field run by Aramco to meet what it says is growing energy demands in different parts of the world.

Riyadh is looking to introduce a five per cent IPO of Aramco in the near future.

The oil company is believed to be worth in excess of $2.5 trillion.

The IPO is part of a new Saudi strategy – Vision 2030 – to slowly move away from dependence on oil and gas.

The BRICS Post with inputs from Agencies