Nigerian junior oil minister Emmanuel Kachikwu on Friday said he did not expect Iran's full return to the oil market following the lifting of sanctions to exacerbate the current global oversupply of crude but to take the place of US shale production as it declines.
"I would imagine that initial levels [of Iran's extra supply] will be moderate," Kachikwu, who is OPEC's current president, told reporters just ahead of a key OPEC meeting now under way in Vienna. "It will take time to scale all their production facilities. It will be moderate, but they will fit in [within OPEC] and frankly, as you see, the drop in shale production, we will all see Iran lift most of its weight and market base."
He added that he was not worried about Iran's return to the market and that it would be "ridiculous for any OPEC member to expect Iran [to stay] out of the market."
Kachikwu's comments contrasted sharply with those he made on Wednesday, when he told reporters in Lagos that Nigeria would ask OPEC to pressure Iran to delay its plans to increase its oil exports when nuclear sanctions are lifted.
"I will be meeting one-on-one with other OPEC ministers to try and see how we can at least get to delay Iran flooding the market with 1.5 million b/d. I will be talking with Iran's oil minister on that so that we can stabilize the price," Kachikwu said then.
Asked Friday about that proposal, he denied putting such a plan forward.
"Nigeria doesn't have such a proposal," he said.
Iranian oil minister Bijan Zanganeh on Thursday had blasted Kachikwu for his comments, saying the Nigerian minister was speaking "out of his competence."
Zanganeh has said Iran would boost its crude exports by 1 million b/d within six months of the lifting of international sanctions imposed on its oil sector, which, according to some Iranian officials, could be as early as January 2016.
Iran has been subject to tightened sanctions that have resulted in its oil exports dropping to just 1 million b/d from previous levels of 2.2-2.3 million b/d.
"If someone cares about the market's disorder and low oil price, they should pressure those countries which have taken Iran's production share, instead of ignoring the legitimate sovereign right of a country with their comments and then [asking] the country which has been subject to unfairness to voluntarily continue the unfair restrictions against herself like before," Zanganeh told oil ministry news service Shana.
Nigeria, like other oil producing companies, has seen its finances badly hit by the decline in oil prices.
Brent crude is currently trading below $45/barrel, having fallen from levels as high as $115/b in mid-June last year.
"I think 2016 will be very important, in terms of both the dynamics of [Iran's] comeback, the dynamics of reduction in production and reduction in investment and contraction of the market as it were we will begin to see [prices] trending upwards," Kachikwu said.
