Investors watch as Iran starts talks on oil output levels
TEHRAN - 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 programme 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 US- and European-imposed embargo that flattened its exports.
However, Saudi Arabia and Russia said their agreement Tuesday to freeze output at January levels was conditional on other major producers doing the same.
Iran's Oil Minister Bijan Zanganeh and his Iraqi and Venezuelan counterparts Adel Abdul Mahdi and Eulogio del Pino were joined in Tehran by Qatar's Energy Minister Mohammed bin Saleh al-Sada.
Their talks 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.
Saudi Arabia's Oil Minister Ali al-Naimi said the agreement with Russia was designed to stabilise 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 US shale oil producers, out of 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.
Russia has seen its recession-hit economy damaged by the slump, though even Saudi Arabia has announced a record budget deficit.
But Iran's economy has suffered even heavier losses because of the sanctions, which saw foreign companies pull out as the embargo decimated international sales.
Iran had been producing around 2.8 billion 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 will be only 25 percent reliant on oil revenues.