Low oil prices will hit investment in oil production capacity expansion projects, Iranian Oil Minister Gholamhossein Nozari said today.
"I think the low price is a real damage to the future of production," Nozari told reporters in Bahrain's capital Manama, adding that OPEC should try to strike a balance between supply and demand in the extraordinary meeting it has called for next month.
US crude oil futures fell $1 to $77.63 a barrel today, dragged lower by expectations economic weakness will cut further into demand for crude.
Falling demand in the United States and other major markets, the financial crisis and a flight of investors into safe haven investments have dragged crude off record peaks over $147 a barrel hit in July.
"The situation of the global economy is the main reason for the (price drop)," Nozari said when asked about the current oil price levels. "Who is satisfied?"
Nozari said capping investments into upstream projects to increase production capacity would create problems when demand for oil picked up again.
"In the future we will face a lot of difficulty and problems for more production if the market needs it."
Reuters