Iran welcomed the decision to reduce oil production and agreed to freeze its output after the recent negotiations conducted between OPEC and non-OPEC countries. By doing so, world’s major oil producers try to prop up global crude prices and restore the supply and demand balance. In addition, Iran said the measures taken by other exporters to curb production are the first step to stabilize oil prices.
If Tehran had refused to freeze production at January levels as it was suggested by Russia, Saudi Arabia, Qatar, and Venezuela, it would have undermined the cooperation of major oil producers. Crude oil prices plunged by around 70 percent from their recent peak in June 2014 due to oil supply glut on the global market. The companies struggle to survive and, therefore, cut investment and downsize their workers. Even Saudi Arabia, an economy largely dependent on oil exports, announced a budget deficit of near $98 billion in 2015, which accounts for 15 percent of its GDP.
