Wednesday 17 February 2016 1:41 pm

Oil production freeze: Iran rebuffs Opec petition for an output cut

Iran has reportedly rejected requests from oil cartel Opec to cut its production, shortly after oil ministers from Saudi Arabia, Iraq, Qatar, and Venezuela landed in the country to carry out talks.

Iranian oil minister Bijan Zanganeh said Iran would resist any plan to rein in its oil output, Reuters reported.

Venezuelan's Eulogio Del Pino, Iraq's Adel Abdel Mahdi and Qatar's Mohammad bin Saleh al-Sada sat down with Zanganeh at around 11:30 this morning.

Yesterday defacto Opec leader Saudi Arabia brokered a deal in Doha to create the first global oil pact in 15 years, involving Gulf Opec members Qatar, Kuwait, UAE – as well as Venezuela and, importantly, Non-Opec Russia.

The group agreed to cap output at January levels if both Opec and non-Opec countries agreed to do the same.

Analysts poured scorn on the deal however, suggesting it would be impossible to implement and the production cut that’s needed to bring down the supply glut is “nowhere near happening.”

Russia and Saudi Arabia are the two largest producers of oil in the world and are both struggling in the face of a 70 per cent oil price crash over the past 18 months.

The oil price is currently trading at $33.15 for Brent crude and $29.80 for the US benchmark WTI.

Iran has vowed to increase production following losing market share as a result of international trade sanctions due to its nuclear programme. 

Sanctions cut Iran's output to around 1.1m barrels per day, from 2.5m barrels per day before 2012.

Tehran has since pledged to raise supply by around one million barrels per day over the next six to 12 months.