Iran opposes any Saudi unilateral oil output hike

Tehran, June 18: Iran said on Tuesday it would be opposed to any move by OPEC kingpin Saudi Arabia to raise its oil output without a consensus from fellow members of the oil cartel.

"If Saudi Arabia takes a measure to unilaterally increase (oil) output, it is a wrong move," Mohammad Ali Khatibi, Iran's new representative to OPEC, was quoted as saying by the state television website.

UN chief Ban Ki-moon announced on Sunday that Saudi Arabia had told him it would increase its oil output by a further 200,000 barrels a day in July, although it was not clear if Khatibi was reacting to these comments.

Saudi Arabia is also organising talks among major oil producers and consumers in the Red Sea city of Jeddah next week to discuss the current sky-rocketing prices.

Iran is OPEC's number two producer, behind the Saudis, and has consistently argued that the high oil price has nothing to do with market fundamentals and OPEC's output should not be increased.

"Any increase in production should be approved in the meeting of the organisation's ministers," Khatibi stressed.

Iran's OPEC representative also said there was no shortage in the oil market: "Oil producers are all agreed that the oil market is saturated," he said.

"Evidence shows that consumers will discuss the increase of oil production more than other issues in this (Jeddah) meeting. This is while the producers believe that there is no shortage in the market," he said.

The National Iranian Oil Company's director for international affairs, Hojatollah Ghanimifar, said any boost to output would have little impact on world prices.

"In the current situation even an increase of 500,000 barrels of oil will not make any change in oil prices," Ghanimifar was quoted as saying by the state television website.

Oil futures reached record highs of almost USD 140 a barrel on Monday.

In Asian trade on Tuesday, the main New York futures contract, light sweet crude for July delivery, dropped 15 cents to USD 134.46 per barrel after striking an intraday record of USD 139.89 on the New York Mercantile Exchange.

Earlier on Tuesday, Iranian President Mahmoud Ahmadinejad said that the current high price of oil was artificial and the market was well supplied. "The rise in consumption is lower than the rise in production," Ahmadinejad told a meeting in the central city of Isfahan of OPEC's fund for international development.

"Certain hands, for political and economic ends, are controlling the price in an artificial manner," he said.