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Iran oil official urges cautious OPEC output move

TEHRAN: Oil producers should wait and assess world demand going into the slack spring season before increasing capacity, an Iranian oil official said on Saturday.

Mehdi Hosseini, the deputy oil minister in charge of international affairs, was quoted by the English-language Iran News as saying producers should wait perhaps as long as September before taking action on production increases.

"March is not a suitable time for changing the situation or the production level because seasonal demand at the beginning of spring drops by about three million barrels a day," Hosseini, who does not set Iran's OPEC policy, told the newspaper.

"We have to stay and wait, and in case the price goes up more than what it is today, we can decide on increasing our capacity at the September (OPEC) meeting," he was quoted as saying.

The Organisation of Petroleum Exporting Countries has come under increasing pressure from Western governments, led by the United States, to agree to raise output at its March 27 meeting in the hope of stabilising world prices.

Iran has repeatedly voiced its oposition to a production increase.

But after talks between the Saudi and Iranian oil ministers on Wednesday, OPEC sources said Tehran would no longer oppose an increase in supplies.

Iran and Saudi Arabia released a statement after the talks expressing joint support for OPEC to provide the market with adequate supplies.

"Stability and control are our top priorities in implementing oil policies in the international market which we normally achieve through consultation with other OPEC members," Hosseini said.

On Thursday, the Clinton administration welcomed Iran's decision to work with Saudi Arabia to implement a crude oil production increase that would replenish world supplies.

Signs from oil producing countries are pointing to a likely OPEC decision to raise output, but it remains far from clear how much additional oil the cartel would be willing to ship.-Reuters