TEHRAN: Iran’s crude oil traded above $53 a barrel in the week to April 14, reflecting the global confidence in a pact between OPEC and non-OPEC producers to slash supplies to boost flagging oil prices.
Iran Heavy, the country’s main export grade, gained $1.82 per barrel to settle at $53.10 in the week. The country’s light crude rose 99 cents to $52.42 a barrel, IRNA reported on Sunday, citing a report by the Oil Ministry. Both grades have held above the $50-per-barrel mark in 2017 on the back of the global supply cut deal. Eleven members of the Organization of Petroleum Exporting Countries and 13 producers outside the oil bloc announced a deal last year to erase a total of 1.8 million barrels in daily production in the first half of this year to ease a global oversupply which dislodged prices over the last three years.
Iran was exempt from the cuts because it is boosting production after years of economic sanctions that stifled its oil production. The No. 3 OPEC producer was allowed to pump around 3.8 million barrels a day in the first six months of the year. According to OPEC’s latest monthly report, Iran’s crude oil averaged $51.71 between January and March, up more than 80% from March 2016, when global benchmarks had slumped to less than $30 a barrel, the lowest in more than a decade. Saudi Arabia, the world’s top producer ahead of Russia, is responsible for almost one-fourth of the total cuts. The kingdom’s own data showed its crude exports dropped to the lowest level since May 2015, signaling OPEC’s adherence to the global oil deal. OPEC reported on Friday that its basket of thirteen crudes stood at $50.48 a barrel on April 20, compared with $51.88 the previous day, according to OPEC secretariat calculations.
Oil prices have seesawed in the $50-55 zone in the past few weeks. Planned production cuts and unexpected shutdowns among producers have helped stabilized oil prices above $50, but the bullish prospect has encouraged US shale producers to bring more rigs online, thus capping any significant gains. An OPEC and non-OPEC technical committee that oversees the implementation of output cuts recommended last week that producers extend the cuts for another six months from June. International benchmark Brent futures were near settled at $52 a barrel on Friday. US crude slipped below $50 a barrel, the first time in two weeks.
