Reuters: Iran dismissed on Saturday Saudi Arabia's decision to boost oil output as a "political move" and said any OPEC production hike would only lead to an increase in reserves, an Iranian news agency said.
TEHRAN (Reuters) – Iran dismissed on Saturday Saudi Arabia's decision to boost oil output as a "political move" and said any OPEC production hike would only lead to an increase in reserves, an Iranian news agency said.
Oil Minister Gholamhossein Nozari was speaking a day after OPEC kingpin Saudi Arabia, a key U.S. ally in the Middle East, announced a modest increase in output after an appeal from visiting President George W. Bush.
"No, because I think a hike in output will add to an increase in reserves," Nozari told reporters when asked whether the 13-member cartel would increase production as requested by the United States.
Asked about Saudi Arabia's announcement that Riyadh had agreed to boost output by 3.3 percent, or 300,000 barrels per day, to loosen up the market and make up for declines in other OPEC nations, he was quoted by Fars News Agency as saying:
"This action is more of a political move … this action will only help to increase reserves."
Iran, seen as an oil price hawk, is the second-largest producer in the Organisation of Petroleum Exporting Countries (OPEC) after Saudi Arabia.
The Islamic state is at odds with Washington over Tehran's disputed nuclear plans and also over who is to blame for violence in Iraq.
The country has repeatedly said the market is well-supplied with crude and blamed the rising oil price on the weak U.S. dollar and other factors outside OPEC's control.
Oil shot to a record high near $128 a barrel on Friday as a bullish price forecast from investment bank Goldman Sachs drowned out the offer of more supply from Saudi Arabia.
Oil prices have risen six-fold since 2002 and doubled since last year as rising demand from China and other developing nations cinched spare production capacity, adding pressure on the U.S. economy already hard hit by a housing slump.
OPEC's smallest producer, Ecuador, said on Friday that members should consider raising output to stem the oil rally because high prices are hurting the poor.
OPEC had previously rebuffed calls for more supply during oil's recent climb.
The United States says more supply would help lower prices, while OPEC officials blame the high price on factors beyond their control, such as speculation and the weak dollar.
(Reporting by Hashem Kalantari and Zahra Hosseinian; Writing by Fredrik Dahl; Editing by Sanjeev Miglani)