Oil producer countries may have to cut output more than the record amount already agreed to tackle an “unprecedented” slump in prices, Iranian Oil Minister Bijan Zanganeh was quoted as saying on Wednesday by the ministry’s website SHANA.
OPEC+, comprising the Organization of the Petroleum Exporting Countries, Russia and other producing nations, has partnered with other oil-pumping countries including the United States to cut supply by around 20 million barrels per day.
However, the unprecedented deal to withdraw about 10% of global supply already looks inadequate when demand has plunged by as much as 30% due to the economic fallout from the coronavirus pandemic, and the world is possibly just weeks away from running out of storage space for surplus oil.
“If necessary, all producer countries, whether OPEC, non-OPEC and those countries that have not undertaken any commitments so far … have to take more actions to overcome this international crisis,” said Zanganeh.
He said oil producer countries should respect crude production cuts aimed at stabilising the oil market.
“Calm would be gradually restored in the oil market if the output cut agreement is fully implemented … if they want to survive, all producer countries should work together on this issue,” Zanganeh told state TV.
“What is important is that the market has not apprehended the amount of oil output cut as adequate to address the market situation, state of reserves and demand conditions as well as the uncertainties over the new coronavirus crisis.”
Brent crude oil rose 8.4% on Wednesday, as prospects for extra pledges from major producers to cut output prompted a sharp turn up off a session low that had seen the global benchmark fall below $16 a barrel to its lowest since 1999.