Iran, which has been exempted from the OPEC oil production cut agreement closed last November, is now ready to join the initiative as long as there is consensus among the cartel’s members. That’s what Oil Minister Bijan Zanganeh told media yesterday, adding that most OPEC members seem to be already in favor of the extension.

The minister did not go into any details as to how much Iran would be willing to cut off its daily output or from what monthly production level the cut will be effected.

The remarks suggest that Iran has reached an oil output level that it is comfortable with for the time being, or that serves as a sufficient base for it to continue to ramp up production until May 25, when OPEC will meet in Vienna to decided on the extension. The country was exempted from the initial agreement and allowed to increase its crude output to about 4 million barrels—the production level before Western sanctions were imposed on the country.

According to OPEC’s latest Monthly Oil Market Report, Iran produced 3.79 million barrels daily last month, down slightly from the 3.82 million bpd in February but higher than the 3.78 million barrels in January. The country is pushing ahead with its energy industry revival, shortlisting 29 companies to bid for oil and gas exploration in future tenders and striking deals with Lukoil and Total for the development of local deposits. Related: 2020s To Be A Decade of Disorder For Oil

However, recently Zanganeh’s ministry has run into a stumbling block in the shape of the Supreme National Security Council. The body is still reviewing the International Petroleum Contract drafted by the Oil Ministry that aims to motivate international oil majors to return to Iran, granting them the right to book local reserves and acquire stakes in local companies – two things that were missing from the traditional buyback scheme and that face severe opposition from Iran’s conservatives.

By Irina Slav for Oilprice.com

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