Iran's oil minister said on Friday there was no reason to consider global crude prices too high and described the oil market, which has been boosted by unrest in the Middle East, as "not extraordinary". "The price depends on the oil market ...If you consider the price ...in the past 40 years, what we have today is a logical price," Massoud Mirkazemi told a news conference on the first day of an oil and gas conference in Tehran.
Ahmad Qalebani, the head of state National Iranian Oil Company, said: "The price, which is around $120, is a good price for us." Brent crude held steady above $122 a barrel on Friday after China's economic growth beat forecasts. Talking to Reuters at the conference, Iran's Opec governor said the oil price would increase if tensions in the Arab world worsened and said the Organisation of the Petroleum Exporting Countries could do little to calm the market.
"Opec's capability is limited. There are fundamentals that Opec can control, but there are non-fundamental issues like geopolitical, political, military, psychological factors which nobody can control," Mohammad Ali Khatibi said. "If the crisis and tension intensifies and also if some oil exporting countries get involved then, yes, the price of oil will increase," he said.
Some members of the formally eased output restraints to accommodate the loss of exports from Libya, where conflict between the government and rebels interrupted supply. Iran has said there is no need to increase output. Khatibi added that he saw demand for oil rising as Japan recovers from its March 11 earthquake and tsunami. "There is a balance in the market," he said. "Demand is likely to increase after events in Japan."
When asked about Opec's spare capacity, Khatibi said: "There are various figures but I believe it is 4-5 million." A recent Reuters poll of banks, consultancies and fund managers found on average that Opec's core Gulf members held spare capacity of around 3.2 million barrels per day.