VIENNA: Iran’s Minister of Petroleum Bijan Namdar Zangeneh (left) and Saudi Arabia’s Minister of Petroleum and Mineral Resources Ali Ibrahim Naimi speaks to journalists at a hotel in Vienna prior to the OPEC oil ministers’ meeting today. —AP

VIENNA: Cheap oil that could get even cheaper: That's the challenge OPEC ministers face as they try to cut their losses at a time when supply is outstripping demand. But their hands appear tied.

Ahead of their meeting today, there is recognition that the 12-member Organization of the Petroleum Exporting Countries will be unable to nudge up prices, at least in the short term.

Non-OPEC countries like Russia and the US continue to challenge OPEC for customers. And within the cartel, Iran and Iraq want to start pumping more, even though regional rival Saudi Arabia appears unwilling to play along by reducing its own output.

The Saudis and other OPEC states are looking to maintain their market share at a time when low prices are already cutting into their revenues. The upshot is the meeting will likely decide to maintain the official OPEC level of 30 million barrels a day, urge members to cut back on overproduction and hope for better times next year. That means oil could get even cheaper.

Iran's comeback is tied to the looming end of sanctions imposed over its nuclear program. Embargoes on Iranian oil are to be lifted over the next few months once a nuclear deal it signed with six world powers goes into force.

Iran's comeback

Senior oil official Amir Hossein Zamaninia said last week Iran hopes to bring an extra 500,000 barrels on the market by early next year. He said he hopes the extra output will be accommodated within OPEC's formal ceiling of 30 million barrels a day.

Arriving for the meeting today, Iranian oil minister Bijan Namdar Zanganeh said Iran is ready to discuss a ceiling for its production - but only after his country makes a "full return to the market."

Iran will not bow to pressure to avoid increasing its oil output following the lifting of sanctions despite slumping crude prices, its oil minister insisted here yesterday.

"We don't accept any discussion about the increase of Iranian production after lifting the sanctions," Zanganeh told reporters.

"It's our right" to pump out more crude, he added. Zanganeh said the aim was to first increase output by half a million barrels a day beginning early next year, eventually rising to one million barrels extra which will bring its daily total to around 3.8 million.

But Iran's hopes of a cutback from others for now are unlikely to be fulfilled. Ahead of the meeting, OPEC already was churning out well over than 31 million barrels a day and OPEC members are likely to continue producing more than their share as they push to compensate for low prices by increasing output.

Some of those extra barrels will likely come from Iraq. The world's fastest-growing source of crude this year, it was pumping more than 4 million barrels a day last month and was responsible for last month's biggest monthly rise in output among all OPEC countries. These trends mean that the pressure is on Saudi Arabia, which accounts for about a third of OPEC's output, to cut back.

Saudi opposition to a cut in OPEC output a year ago was calculated to put higher-cost outside competitors - such as US shale oil producers - out of business, in the hope that would eventually lead to a drop in supply and a rebound in prices. That strategy clearly hasn't worked, with benchmark US crude's value falling by more than 40 percent over the past year and now hovering around the $40 mark per barrel.

Saudis unrelenting

But the Saudis appear in no mood to act unilaterally. Analysts at Energy Aspects say the kingdom is "only likely to cut once it can influence the market again" - a scenario that is unlikely before the second half of next year considering present plentiful supply.

That seems to leave only an increase of Middle East turmoil as a potential price driver, for now. Ed Cowart, of Eagle Asset Management, points out that uncertainty over global supply was the justification for $100-per-barrel oil a couple of years ago." Noting there are at least three shooting wars within about 1,000 miles (1,600 kilometers) of about 30 percent of the world's oil production in

With oil prices falling heavily on Wednesday, having already slumped by more than 60 percent in around 18 months, Iran is facing pressure from within the Organization of the Petroleum Exporting Countries and outside OPEC not to raise output.

"It's not acceptable, it's not fair," Zanganeh said yesterday. "It's not a matter of discussion with anyone to limit the level of production of Iran."

Despite a supply glut keeping crude prices around $40-$45 a barrel, Iran has consistently said it plans to up its output when nuclear-related sanctions are lifted under a deal agreed in July with world powers.

Analysts meanwhile expect OPEC-whose 12 member nations from the Middle East, Africa and Latin America pump out about one third of the world's oil-to leave its daily oil output ceiling at 30 million barrels at yesterday's meeting. Nevertheless, it may agree to trim excess production in a bid to support prices and in turn producers' revenues.

According to a survey by Bloomberg, OPEC production in November rose to 32.12 million barrels per day. "We have no responsibility for the situation that is in the market," Zanganeh said. "Iran has no responsibility in this (price) drop, this is the responsibility of the OPEC member producers and others who have produced more than the (OPEC) ceiling." - Agencies