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May 25, 2011, 09.17 PM IST | Source: Reuters

Iran says OPEC will help cover supply shortage

Iran says OPEC will help cover supply shortage

Iran says OPEC will help cover supply shortage

Iran's OPEC governor acknowledged on Wednesday that there was a shortage of supply in the global oil market, saying OPEC was acting to balance the market and would continue to do so.

"OPEC is trying to compensate part of the shortage of supply of crude and create a balance in the market and in the future OPEC will continue to do its onerous duty which is to create balance in the market," Mohammad Ali Khatibi was quoted as saying by the semi-official Mehr news agency.

Also read: Saudi keeps oil supply steady ahead of OPEC meeting

The comment from the second-largest producer in the Organization of the Petroleum Exporting Countries, two weeks before a crucial OPEC meeting, was of a less hawkish tone than usual.

On April 19, the then oil minister, Massoud Mirkazemi, said any increase in production would have no impact on prices.

Khatibi said he expected global demand for crude to rise to 88.9 million barrels per day (bpd) by the end of the year and demand for OPEC crude to rise to 29.8 million bpd by year-end from 29.7 million in the first quarter.

His comments come ahead of a June 8 OPEC meeting in Vienna.

Iran, which holds the group's rotating presidency has yet to say who will represent the Islamic Republic at the meeting after Iranian President Mahmoud Ahmadinejad sacked Mirkazemi and appointed himself caretaker head of the ministry.

Ahmadinejad said on Monday he would send a member of his cabinet and not attend himself.

The prospect of the fiery anti-Western president appearing in person at OPEC had led analysts to believe any move to raise output targets would be harder to achieve.

Last week, the West's energy watchdog, the International Energy Agency, urged producers to boost supply and appeared to suggest its members could release emergency stockpiles if OPEC failed to act.

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