Iran, Saudi Arabia agree on increase in oil output

NICOSIA [MENL] -- Iran and Saudi Arabia have agreed to coordinate positions on an oil output increase ahead of an OPEC summit later this month.

The oil ministers from the two countries appeared to resolve what threatened to have been a showdown at the OPEC meeting on March 27 in Vienna regarding an oil output increase. The United States has pressured OPEC members to increase oil production in an effort to drive down prices, now at their highest point in nine years.

Saudi Arabia has been in the forefront of an effort to increase oil output while Iran has been vociferous to maintain current production. The Islamic republic in Teheran has accused the United States of pressuring Arab oil producing states of agreeing to an oil production increase starting from April 1.

Analysts said the Saudis appear to have won out. In a joint communique issued on Wednesday, the oil ministers of Iran and Saudi Arabia agreed to a gradual and suitable increase in oil output. This was Iran's first commitment to an oil output increase.

The two countries also agreed that current prices are not in OPEC's interest and pledged to embark on a joint effort to stabilize the market.

Analysts said the OPEC oil ministers will now have to set an output increase. They said OPEC members appear to favor a 1 million barrel per day increase. The United States is pressing for a 2 million barrel per day increase.