Zangeneh: COVID-19, Main Culprit in Recent Oil Price Fluctuations

Iranian Minister of Petroleum Bijan Zangeneh says that coronavirus is to blame for recent price fluctuations in the oil market.

Speaking to reporters following a meeting with a number of university presidents on Monday, Mr. Zangeneh said, “Outbreak of coronavirus is the main reason for the recent fluctuations [in the market], as it has shut down most economic activities in China, resulting in lowering the demand for oil.”

He stressed that the lack of supply/demand balance would reduce the prices in the oil market, adding the Organization of the Petroleum Exporting Countries (OPEC) had decided to cut further oil output prior to the March meeting, but due to the lack of a consensus among the members, a decision would be made about this matter in the March 4 meeting of the organization.

The Iranian Minister of Petroleum said that the oil market developments were the focus of his recent phone conversation with his Russian counterpart, Alexander Novak, adding, Mr. Novak believed that there was no need for deepening oil output cuts prior to the OPEC meeting in March.

Asked about a proposal by Saudi Arabia, Kuwait and the United Arab Emirates to cut production by 500,000 barrels/day because of falling oil prices, Mr. Zangeneh said these countries sought participation of non-OPEC producers in deepening the cuts.

"God willing, I will attend the meeting and my flight will be with Iran Air," Zangeneh said as to whether he was attending the OPEC meeting due to the disruption of Iranian flights due to the spread of the coronavirus.

He also said that he had signed off on a directive to combat COVID-19 in the petroleum industry.

MOP Cooperation with Universities

Elsewhere, Zangeneh told the reporters: "Manufacturing the national turbine, the acquisition of LNG technology for small units, smart gas metering and sweetening as well as natural gas purification are part of the good work that is being done in some areas that have been resulted from cooperation of the Iranian Ministry of Petroleum with the research institutes of universities.“

Zangeneh emphasized that there was good potential for collaboration between the university and the oil industry in the downstream sector, given the widespread presence of postgraduate and doctoral students in the country, adding that such a golden opportunity for the downstream sector of the oil industry must be used for national development, technology creation, and problem solving for the oil industry.