Iran downplayed on Monday the chances of OPEC and non-OPEC oil producers clinching an output-restraint deal in Algeria this week even though several other members of the group said they still hoped for steps to tackle a price-eroding glut of crude.

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.

The predominant idea since early 2016 among producers has been to agree to freeze output levels, although market watchers have said such a move would fail to reduce unwanted barrels.

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.

As delegations gathered in Algiers, Iranian Oil Minister Bijan Zanganeh said expectations should be modest.

“This is an advisory meeting and that’s all we should expect from it,” he was quoted as saying by oil ministry news service SHANA before he left Tehran. “The talks among OPEC members can be used for the OPEC summit in Vienna in November.”

Crude prices rose by 3.5 percent on Monday, recouping most of the losses sustained on Friday, when hopes for an output deal in Algeria faded.

One OPEC delegate said the focus was now firmly on trying to persuade Iran to freeze output at levels acceptable for the rest of the producer group.

Iran’s output has been stagnant at 3.6 million barrels per day (bpd) in the past three months, close to what the country produced before the imposition of European sanctions in 2012.

The sanctions were eased in January 2016, and Iran has said it wants to achieve output of more than 4 million bpd.

On Monday, an OPEC source said Iran was still insisting on being allowed to reach 4.1-4.2 million bpd before freezing production.

“SIGNIFICANT ACTION”

Some ministers and officials expressed hope that a deal could emerge this week.

“For us in the UAE, we are for a decision. We think a freeze will help if it is agreed. We hope that all are going to agree,” the United Arab Emirates’ energy minister, Suhail bin Mohammed al-Mazroui, told Reuters.

Algerian Energy Minister Noureddine Bouterfa said everyone in the Organization of the Petroleum Exporting Countries agreed that the market was badly oversupplied and the situation had worsened since the last OPEC meeting in June.

“Credible and significant action is needed to help the market rebalance … One fundamental aspect is that OPEC production should be significantly below the level of August. The second is that the effort must be shared out.”

“Third is that any agreement be limited to the time it takes to reabsorb oil stocks. And the fourth is that the action should be credible in the eyes of the market and verifiable,” Bouterfa told French-language Algerian daily Liberte.

Members of OPEC will meet on the sidelines of the International Energy Forum, which groups producers and consumers, from Sept. 26-28.

Russia is also attending but there is no evidence the country is preparing to participate in any production action.

Source: www.reuters.com