Iran sees balanced oil markets

TEHRAN, June 15 (UPI) -- The global market for oil will remain balanced when Iran reaches its full export potential even if that means cuts from OPEC members, an envoy said.

Mehdi Assali, the Iranian envoy to the Organization of Exporting Countries, told the Oil Ministry's news agency, Shana, equilibrium would prevail.

"The market will continue to remain balanced [event] after Iran's return," he said. "[Fellow OPEC members] will have to cut their production so that Iran's return would not cause a drop in the prices."

Iran holds the third-largest proven oil reserves among OPEC member states, behind Venezuela and Saudi Arabia, respectively. Under the terms of a joint deal reached in November 2013, oil exports are limited to around 1 million barrels per day and to just six countries: China, India, Japan, South Korea, Taiwan and Turkey. Exports could double if all sanctions are released by the end of June, when negotiators expect the final signatures on a multi-lateral nuclear deal.

Iran's oil minister, Bijan Zangeneh, said the Islamic republic could return as a dominant force in OPEC if sanctions are lifted as a result of nuclear negotiations with international powers.

"These countries [in OPEC] are well aware that if they refuse to accept Iran's proposal, OPEC will become an ineffective organization," the envoy said during the weekend.

Sanctions on Iranian oil exports and other parts of the economy resulted in an economic contraction of 5.8 percent in 2012-13, though Iran has since emerged from recession.

OPEC earlier this month opted to keep production levels static, taking note of the expected increase in global demand in the second half of the year. Zangeneh last week complained OPEC is not a place for broad-based diplomacy.