Iran Starts Talks on Oil Output Levels

Iran's oil minister started talks Wednesday with his Iraqi, Venezuelan and Qatari counterparts as investors watched whether Tehran would follow Saudi Arabia and Russia's pact to freeze output.

Iran returned to the global oil market just weeks ago after sanctions on its energy and banking sector were lifted upon implementation of a landmark deal on its nuclear program with world powers.

The Islamic republic has long said it must pump more oil -- despite plunging prices -- as it seeks to regain market share lost during a U.S.- and European-imposed embargo that flattened its exports.

Saudi Arabia and Russia said their agreement Tuesday to freeze output at January levels was conditional on other major producers, such as Iran, doing the same.

Iran Oil Minister Bijan Zanganeh's meeting with Iraq's Adel Abdul Mahdi, Venezuela's Eulogio del Pino and Qatar's Energy Minister Mohammed bin Saleh al-Sada started at around 1100 GMT, according to Iran's oil ministry news service, Shana.

Qatar currently holds the revolving chairmanship of the OPEC oil cartel.

Zanganeh said Tuesday that Iran "won't relinquish" its market share but added that "there was room for discussion and examination" of moves to fix a production ceiling.

However before Wednesday's talks Mehdi Asali, Iran's director general of OPEC Affairs at the oil ministry, blamed other producers for creating a glut and signaled Tehran would not change course.

"As these countries produced more than their quota and more than the OPEC official ceiling of 30 million barrels, which they had agreed on, the price collapsed and so now the responsibility to bring back balance to the oil market is mainly on these countries," he told the Shargh daily.

- Iran becoming less oil dependent -

"Therefore they should reduce their output without having any expectations from Iran.

"Iran's output compared to then (before sanctions) is 1.5 million barrels per day less and it's illogical to ask Iran to further reduce its production."

Saudi Arabia's Oil Minister Ali al-Naimi said the agreement with Russia was designed to stabilize the market following the dramatic price fall since mid-2014.

That step followed a closed-door meeting in Doha between Saudi Arabia -- the de facto leader of OPEC -- Venezuela, Qatar and Russia, which does not belong to the oil cartel.

The announcement of the freeze marked the first move between OPEC and non-cartel producers to stem the price fall since the slide began.

Saudi Arabia and other OPEC producers have been refusing to reduce output in an attempt to drive less competitive players, in particular U.S. shale oil producers, out of the market.

Russia has seen its recession-hit economy damaged by the slump and Saudi Arabia has announced a record budget deficit.

But Iran has suffered even heavier losses because of the sanctions, which saw foreign energy companies pull out and the embargo decimated international sales.

Iran had been producing around 2.8 million barrels per day, around one million of which were exported, but after the nuclear deal it announced an immediate hike of 500,000 bpd. A further 500,000 bpd are planned to be added by the end of 2016.

Despite its push to ramp up production Iran has been moving away from an oil-dependent economy. The coming year's budget, starting on March 20, will be only 25 percent reliant on oil revenues following moves to increase general taxation.