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Iran, Iraq Weigh Oil Production Freeze Pact

FILE - Oil technician Majid Afshari makes his way to the oil separator facilities in Iran's Azadegan oil field southwest of Tehran.

Iran's OPEC envoy said Wednesday the country plans to increase its oil production to levels it had before the imposition of international sanctions sharply cut its exports.

The comments came ahead of a meeting in Tehran of oil ministers from Iran, Iraq and Venezuela to discuss a proposal to freeze production in order to battle a drop in oil prices.

Russia and OPEC members Saudi Arabia, Venezuela and Qatar agreed Tuesday to keep their oil output at January levels.

Saudi oil minister Ali al-Naimi said that amount of production is "adequate," but that the agreement is only good if other large producers sign on as well.

"We don't want significant gyrations in prices," Naimi said. "We don't want a reduction in supply. We want to meet demand and we want a stable oil price."

The pact to freeze production marks a shift in Saudi oil policy. For months, as oil prices plunged, Riyadh had refused to curb its production in an attempt to force other oil producers, especially U.S. shale oil producers, out of the market.

But with producers across the globe pumping too much oil, coupled with some economies slowing and thus not needing as much oil to fuel their industrial production, prices continued to fall.

That in turn has hurt oil-dependent government budgets, particularly in Russia and Venezuela. But even oil-rich Saudi Arabia, with some of the world's biggest untapped oil reserves, says it has a record budget deficit.

The Doha meeting could be a signal that oil-producing nations, including OPEC members, might eventually agree to an outright production cut to halt a 19-month slide in prices that has sent oil falling below $30 a barrel for the first time in well over a decade.

Some analysts have predicted that prices will eventually fall to at least $20 a barrel before any recovery begins.