While the OPEC members have announced this time that the informal talks in Algiers from October 8-13 would result in a serious conclusion to bring stabilization in the oil market, on the flip side, there seems to be no stopping for Iran where production is concerned.
With the uplifting of the Western sanctions in January, that were imposed over its nuclear program, the South Asian country aims to pump crude at pre-sanction levels. Citing the country’s news agency SHANA, Marzieh Shah-Daei, CEO of National Petrochemical Company stated Iran’s plans of expanding its petrochemical production to 160 million tons from the existing level of 60 million tons over the next ten years. To boost its production, the company has already formed alliances with the big oil.
According to Reuters citing news agency SHANA, the country’s National Petrochemical Company entered into a Memorandum of Understanding (MoU) with Royal Dutch Shell plc (ADR) (NYSE:RDS.A). The agreement would pave ways for the energy company to cooperate and gain a foothold in the petrochemical sector of Iran.
Although no other details on the matter have been disclosed yet from either side, negotiations between the two parties regarding the MoU have been going on for long. Hans Nijkamp, Head of Iranian affairs at Shell stated: "We believe that we can have joint projects in the petrochemical field with the National Petrochemical Company."
In addition, Amir-Hossein Zamaninia, Iran’s Deputy Petroleum Minister for International and Commerce Affairs showed optimism toward the latest move stating that the startups between the two companies would be “executed sooner than oil and gas projects.”
Not only Shell, but the state-owned oil company has also joined hands with BP plc (ADR) (NYSE:BP). As reported by Bloomberg, the cargo carrying supplies of South Pars condensate is expected to be loaded between September and October. More so, the country has other potential buyers for its energy products including Trafigura Group.
According to Stock News Today, although the latest moves by the country are beneficial for its economy that had been heavily distressed over the sanctions, they negatively contribute to the current oil downturn. Without serious efforts by Iran, a key player of the oil exporters’ group (OPEC), the market rout is not to see a recovery soon. We believe that unless the country does not act in the best interest of the global oil industry keeping aside its personal interest, the oil prices would not see a significant rally.