Oil Prices - August 23

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Oil prices rose today as news that Iran may be ready to join a wider production freeze surfaced.

Both OPEC and non-OPEC producers such as Russia previously tried to implement a production freeze, but were unsuccessful when Saudi Arabia insisted that Iran take part in the deal, and the Islamic Republic refused to slow production growth before reaching pre-sanction levels.

OPEC’s third-largest producer has not yet reached the 4 MMBOPD mark it set prior to the implementation of international sanctions, but it does appear to be softening its stance as it approaches that watermark.

“Iran is reaching its pre-sanctions production level soon and after that it can cooperate with the others,” a source familiar with Iranian thinking told Reuters. “In general, Iran prefers more actions from the OPEC side rather than just freezing at the maximum production level of all members. If this freezing issue helps prices to improve, Iran by positive words of support, will help.”