Agreed on by the Russian and Saudi Arabian-led group on Tuesday, it is “illogical” for it to join the oil output freeze, reported by Iran’s Opec.
Iran will continue to increase oil production until it reaches pre-sanction levels, quoted by Mehdi Asali in the Iranian newspaper.
In Tehran on Wednesday, Venezuela’s oil minister is due to hold a talk to make an agreement with Iran and Iraq. After the sanctions were lifted, Iran has only now restarted oil exports.
In over 15 years, the move by four countries which includes Venezuela and Qatar, is the first of its kind.
On Tuesday the trading price of a barrel of Brent crude had fallen by 3.2%, there for the plan failed to convince oil traders.
The oil ministry in Iraq is in favour of capping production.
If a deal was reached among other producers, it would be ready to commit a freeze.
“Asking Iran to freeze its oil production level is illogical… When Iran was under sanctions, some countries raised their output and they caused the drop in oil prices.” Quoted by Iran’s Mr Asali to Shargh.
“How can they expect Iran to co-operate now and pay the price?”
Over the next six months, the aim to raise crude production and exports is to one million barrels a day.
Iran could be offered special terms as part of the output freeze deal, told my two non-Iranian sources close to the Opec discussions.
There are doubts over the worth of the move.
Said by Paul Stevens, from the Royal Institute of International Affairs at Chatham House and an expert on the oil markets, Tuesday’s agreement had “no credibility whatsoever”
Paul Stevens pointed out, Russia, had reneged on previous production agreements, who is not a member of the Opec cartel. Back in 2001 it last agreed to co-operate with Opec, but instead of following through on its pledge they raised exports instead.
Rather than to raise prices, US shale producers, Saudi Arabia and its Opec allies have followed a strategy of raising production to protect market share.
Tensions also remain between Saudi Arabia and Russia over Syria.
While Saudi Arabia as the regional Sunni power is backing opposition forces, Russia is supporting President Assad’s regime with the help from Iran.