Plans for a deal to clear the global oil supply glut with a production freeze have hit a hurdle after the Iranian oil minister refused demands from Saudi Arabia to throttle its production.
Iran’s Bijan Zanganeh told the country’s Mehr News Agency today Iran still intends to increase its output to four million barrels a day, back to pre-sanction levels. In late 2015 Iran was producing around three million barrels per day.
On Friday Saudi Arabia’s deputy crown prince Mohammed bin Salman surprised the market by saying any output freeze deal would be dependent on Iranian participation.
The oil price was sent lower on the news, falling by almost five per cent to $38.65 per barrel of Brent crude on Friday.
It was previously thought the freeze would go ahead without Iran, causing the oil price to climb around 50 per cent from January lows of $27 per barrel.
Russia is set to meet with Saudi Arabia and other members of the Organization of the Petroleum Exporting Countries (Opec) on 17 April in Doha for second round talks over a production freeze at January levels.