Iran’s OPEC envoy says ‘illogical’ to freeze oil output

Iran is unlikely to freeze its oil production levels and join the agreement taken by Saudi Arabia, Russia, Qatar and Venezuela to cap output, a senior official has said.

The four countries agreed on Tuesday to freeze production at January levels provided other major producers follow suit.

Senior officials from the Organisation of Petroleum Exporting Countries convened in Tehran on Wednesday to discuss the decision with Iran and Iraq.

However, Iranian newspaper Shargh quoted the country’s OPEC envoy Mehdi Asali as slamming the move.

“Asking Iran to freeze its oil production level is illogical,” he said.

“When Iran was under sanctions, some countries raised their output and they caused the drop in oil prices. How can they expect Iran to cooperate now and pay the price?”

Iran has only restarted oil exports after Western sanctions were lifted earlier this year.

The country is reportedly at least one million barrels per day below its capacity at pre-sanction levels. In comparison, Russia and Saudi Arabia are producing at record highs.

Iranian first vice president Eshaq Jahangiri said this week that the country planned to increase its oil exports from 1.3 million barrels per day to two million bpd in the next few months.

Oversupply and sluggish demand in the market have cause oil prices to plummet to 13-year-old lows this year, after hitting record highs of around $115 per barrel in June 2014.

Brent crude jumped by 6.5 per cent ahead of the oil producers’ agreement on Tuesday, but later dropped by 3.6 per cent. It is currently at around $32 per barrel.