Oil prices rise as Iran says it welcomes crude production freeze

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Global oil prices rose sharply after Iran said it supported any move to stabilise the international crude market and help improve prices after a crucial meeting following an earlier agreement between Saudi Arabia and Russia to freeze output at January 11 level.

According to the Iranian Shana news agency, Petroleum Minister Bijan Zangeneh told reporters that Iran welcomed the cooperation between OPEC and non-OPEC producers.

“The decision taken so that OPEC members and non-OPEC (countries) freeze their production ceiling in a bid to stabilize the market and improve prices in the interest of consumer and producer is also supported by us,” the news agency quoted him as telling reporters.

Zangeneh met the Iraqi, Qatari and Venezuelan oil ministers for talks when they travelled to Tehran from Doha and briefed them about Iran’s return to the international crude market after international sanctions were lifted.

He did not explicitly say Iran too would freeze its output at January 11 level.

“I hope that with the efforts which have been initiated, we would witness improvement of the market’s situation in future,” Shana quoted Zangeneh as saying.

The Organization of Petroleum Exporting Countries (OPEC) decided not to cut production more than a year ago, pushing prices lower. Oil prices are hovering at around 70 percent lower from mid-2014, and the International Energy Agency has said the world is awash with oil given the huge oversupply.

Iran, which had economic sanctions lifted last month, had said it would increase production and exports by 1 million barrels/day. It was widely expected that Iran would take a tough stand on the issue and not agree to a freeze.

 

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