Iran, the number two oil producer in Opec, on Sunday said that the cartel is likely to cut back further on production if the latest reduction does not stabilise crude prices. The Organisation of Petroleum Exporting Countries (Opec), which produces 40 percent of world crude, decided Friday to reduce its production quota by 1.5 million barrels per day as of 1 November to a level of 27.3 million bpd.
Despite the announcement, the price of Brent North Sea crude sank to 61 dollars, the lowest point for 17 months.
"Be assured that if (Friday''s) decision is not effective on the market, the Opec will take steps to consolidate the market and stabilise prices at its next meeting," Iran''s cartel''s representative Mohammad Ali Khatibi said in an interview on state television.
OPEC has said its latest decision would be reviewed at its next meeting in Oran, Algeria, on December 17. Many analysts have questioned the effectiveness of measures taken by OPEC, given the seriousness of the global financial crisis that has sharply reduced the prospects for economic growth and thus oil consumption. Crude futures in London and New York have plunged close to 60 percent from record highs of above 147 dollars a barrel reached only three months ago when supply concerns sent prices soaring.