On Wednesday, the Iranian newspaper Shargh quoted Mehdi Asali, the country's OPEC envoy, as saying that Iran plans to ramp up production until pre-sanctions levels are attained. Iran signaled on Wednesday it would take a tough line in talks among oil producers on restraining production, saying it would continue increasing its output until it reached levels seen before global sanctions were imposed.
The International Energy Agency said in its latest oil market report that OPEC members pumped out 280,000 more barrels every day in January than in December, helped largely by Iran's re-entry into the global markets after the lifting of sanctions that month.
Russia's energy minister said on Tuesday that his country has agreed with OPEC members Saudi Arabia, Qatar and Venezuela to freeze oil production levels if other producers do the same. While the deal hinges on the cooperation of Iran, Zanganeh didn't say whether the Persian nation would deviate from plans to restore exports after global sanctions were removed last month.
The last global deal in 2001 saw Saudi Arabia persuade Mexico, Norway and Russia to contribute to production cuts, although Moscow never followed through and raised exports instead.
Apparently that was perceived as a bullish sign by the oil market, which rallied in anticipation of some sort of agreement among big oil producers.
Goldman Sachs analyst Damien Courvalin said late Tuesday in a research note that "such a freeze will have little impact on the oil market" and that there's "high uncertainty that it even materializes". Despite a glut of oil already on the market - by some measures as much as 1 million extra barrels per day - Iran's oil minister pledged in January to bring online another 1 million barrels per day within the next year.
An Iranian ministry spokesperson said that the talks would start in the afternoon local time. He said the four countries that agreed on the oil production freeze could stabilize oil prices on their own, if they cut their production by 2 million barrels a day.
The sources did not elaborate on the special terms, which could be anything from setting limited production increases to linking future output rises to a recovery in oil prices.
Prices extended gains in post-settlement trade after data from industry group the American Petroleum Institute showed a stockpile drop of 3.3 million barrels versus analysts' forecasts for a build of 3.9 million barrels.
Venezuela, which has the world's largest oil reserves, has suffered enormously as the price of oil has crashed from above $90 a barrel two years ago to below $30 now.