Tehran Gives Cold Shoulder To OPEC On Oil Output Freeze

Russia, Saudi Arabia, Qatar and Venezuela said they were ready to freeze output at January levels as part of a global pact to keep markets from completely drowning in cut-rate barrels and shore up prices.

Iran’s envoy to the Organisation of the Petroleum Exporting Countries (Opec), Mehdi Asali, said it was “illogical” to ask Iran to freeze production levels in comments to the Shargh daily newspaper before the talks on Wednesday.

Iran rejected appeals Wednesday from other oil-producing states to curb its oil exports to try to end the plunge in world crude oil prices, instead saying it intends to increase production.

Iran said in January that it planned to add to its production, stressing that the country should not be held responsible if prices continue to slide.

Following the meet, Iranian oil minister Bijan Zanganeh said that he supports the decision, but did not specify whether Iran would implement the agreement.

Iran’s IRNA news agency said on Sunday the country had exported its first crude shipment to Europe since it reached a landmark deal past year with world powers.

Analysts had expected crude inventories to climb by 3.9-million barrels in the week to February 12, according to a Reuters poll on Tuesday.

The price of oil began falling in mid-2014 as surging output from OPEC, Russia and USA shale producers outpaced demand. West Texas Intermediate spiked more than five percent to finish at over 30 US dollars a barrel, while Brent crude jumped over seven percent to 34 dollars and 59 cents.

“An agreement for all to cooperate in boosting the prices is something Iran is happy to see happening”, Zangeneh said.

“Oil is still bearish and it will take more than one or two years just to get rid of the excess in the market”.

Riyadh has said it would consider output cuts only if other producers agree to follow suit, and pressure has been building as drops in oil revenues hit government coffers.

Mahony thinks a deal is plausible in which Iran freezes production once it resumes its output at pre-sanction levels.

On Tuesday, the energy ministers of Russia, Saudi Arabia, Venezuela and Qatar met in Doha.

Meanwhile, oil prices rose on Wednesday following efforts led by Russian Federation and Saudi Arabia to broker a deal to freeze production levels and ease a global glut.

Oil’s rise encourage both stock markets and the Canadian dollar, which was up three quarters of a cent at 72.92 cents USA at mid-afternoon, after rising to 73.15 cents U.S. earlier in the day.