Iran rejects Saudi oil output offer

Iran today rejected an offer from Saudi Arabia to limit its oil output in exchange for Riyadh cutting supply, dashing market hopes the two major OPEC producers would find a compromise this week to help ease a global glut of crude.

“The gap [in views] between OPEC countries is narrowing. I don’t expect that an agreement will come out of the consultations tomorrow,” Saudi Energy Minister Khalid Al-Falih told reporters.

Iranian Oil Minister Bijan Zanganeh said earlier: “It is not the time for decision-making.” Referring to the next formal OPEC meeting in Vienna on 30 November, he added: “We will try to reach agreement for November.”

The Organisation of the Petroleum Exporting Countries will hold informal talks tomorrow. Its members are also meeting non-OPEC producers on the sidelines of the International Energy Forum, which groups producers and consumers.

Oil prices have more than halved from 2014 levels due to oversupply, prompting OPEC producers and rival Russia to seek a market rebalancing that would boost revenues from oil exports and help their crippled budgets.

Sources told Reuters last week that Saudi Arabia had offered to reduce its output if Iran agreed to freeze production, a shift in Riyadh’s position as the kingdom had previously refused to discuss output cuts.