Iran to Raise Oil Output 'at Any Cost' to Defend Market Share

Crude Glut

OPEC is pumping at near record levels, even amid a global glut of crude. Algeria wrote to others in the 12-member group saying they should consider measures for reviving oil prices and stabilizing the market, two delegates familiar with the request said last week.

Algeria’s initiative to coordinate an OPEC response to tumbling crude prices had the backing of cash-strapped fellow members Libya and Venezuela. It was met with no public response from OPEC’s top producer Saudi Arabia, which has led the group’s decision to maintain its crude output target unchanged at 30 million barrels a day to preserve market share amid rising production from the U.S. to Russia.

OPEC pumped 32.1 million barrels a day of crude in July. Saudi Arabia is set to continue pumping near current levels of about 10 million barrels a day this year and next, Barclays Plc analysts including Miswin Mahesh wrote in a report Aug. 21.

Zanganeh has said that other OPEC members should make room for Iran when it raises output after sanctions are lifted as a result of last month’s nuclear pact with world powers. Iran pumped 2.85 million barrels a day in July, down from 3.6 million at the end of 2011, data compiled by Bloomberg show.

U.S. benchmark West Texas Intermediate crude fell to less than $40 a barrel for the first time in more than six years in New York trading on Friday. The global glut and increased concern that weakening Chinese growth may mean less oil demand has dragged down Brent crude, the global benchmark, by about 21 percent this year.

To contact the reporters on this story: Anthony DiPaola in Dubai at adipaola@bloomberg.net; Hashem Kalantari in Tehran at hkalantari@bloomberg.net. To contact the editors responsible for this story: Nayla Razzouk at nrazzouk2@bloomberg.net Stuart Biggs