Iran’s oil minister has raised the oil price without actually doing anything

Iran’s oil minister Bijan Zanganeh is a consummate politician.

Today he has single-handedly managed to boost the oil price and send Twitter crazy by implying that he will cooperate with other producers in freezing production, without actually saying…anything.

As it stands, the Saudi-led output freeze pledge is pretty lacklustre anyway. Confirming that you won’t lower production from near all-time highs will do very little to address the huge supply glut and slowed demand.

But without Iran’s cooperation, the deal goes from pretty lacklustre to downright useless. Iran, recently freed from international sanctions, was one of the world’s largest oil producers before the embargoes and if it decides to ramp up production then it will render a Saudi/Russian/Qatari/Venezuelan output freeze largely ineffective.

Zanganeh hasn’t explicitly said whether he would freeze production or not, instead sticking to newspeak mumblings of “support” and a “good meeting”, but this in itself speaks volumes.

The fact that the oil price has now lifted above $34 a barrel on this “news” shows exactly why the market should be taken with a pinch of salt.

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