NIOC believes oil market is not facing supply shortage

The National Iranian Oil company (NIOC) director for International Affairs Hojjatollah Ghanimifard said that the oil market is not faced with oil shortage.
"Oil experts are of the consensus that there is excess oil supply in the oil market," Ghanimifard told. He said in the current situation, many regard reductions in OPEC production ceilings in the next ministerial session as "not unrealistic." He also brushed aside any link between the recent oil price hikes and Iran's nuclear dossier.

Some of the news releases in non-energy related Western newspapers have strived to correlate higher oil prices and Tehran's cooperation with the International Atomic Energy Agency (IAEA) and the European trio -- France, Britain and Germany which have been negotiating with Iran on its nuclear program, he added. He also termed the concerns raised as "unfounded" and "unprofessional."
If the concern were real then it should push crude prices similar to Iran's which are of heavy, medium and sour quality to undergo faster prices rise compared with others types of oil including sweet and light crude which according to the news are not bound for exports, he said.

The rise in prices of sweet and light crude and West Texas Intermediate (WTI) led to prices of WTI to hover around $ 68.5 per barrel. But, the price gap between the above-mentioned crudes and other types of oil similar to Iran's such as Dubai crude which touched the $ 3.80 ended up over $ 5, the oil official underlined.
"The market rebuffed such concerns pertaining to Iran as not being adequately news worthy to affect the oil markets," the NIOC official added. This is the reason why when the market opened, the growing price trend was mitigated and the prices of Brent crude and I dropped by $ 1.25 and $ 0.60, respectively, he stated.

He said the rise in sweet crude prices in the period as due to cold weather in many nations in the northern hemisphere and their inability to use gas for heating and fuel needs. He said the dollar exchange rate for the euro as well as British pound and Swiss Francs also decreased, "which often has led to speculation and higher oil prices in the past several years."
The shortage in gas not only in the US, but also in Europe and notably in Britain, was very serious, Ghanimifard underlined. The price of 1.0 mm Btu of natural gas which stood at $ 11.40 rose to $ 15 and $ 15.90 in Britain, the oil official said. He reiterated the real factors which manifested in higher oil prices were not related to the so-called Iran's lack of cooperation with IAEA.

Ghanimifard also said the poorer nations may blame Iran for their higher expenditures on energy. He said much effort and time should be expanded by oil official and experts to remove the misunderstandings and ambiguities in this issue.
It should be mentioned that foreign news sources have reported the reasons for higher oil prices which hovered around $ 70 per barrel, as primary due to colder weather, explosion in Nigerian oil pipeline and Iran's nuclear file.

Iranian Oil Minister Kazem Vaziri Hamaneh said in December that supply and demand in the global oil market has become more or less balanced at the moment. He made the remarks following the 138th Organization of Petroleum Exporting Countries' (OPEC) ministerial meeting in Kuwait City.
"Demand for oil could probably go down in the next few months causing a drop in oil prices," he added. To avoid such a possibility, he said OPEC member states agreed in the meeting to reduce their production quota in the first quarter of 2006.