OPEC should look to reduce oil supply further if demand is insufficient to absorb supplies, Iraq's oil minister said on Tuesday.
"If there is not sufficient demand for OPEC crude we will have to consider a reduction," Oil Minister Hussain al-Shahristani told reporters on the sidelines of a conference.
OPEC, supplier of more than a third of the world's oil, has raced to cut supply to match falling demand from a slowing global economy.
The Organization of the Petroleum Exporting Countries next meets in March to discuss supply.
Shahristani said earlier this month he expected OPEC to reduce supply targets at the March meeting.
The group's pledge to cut by 4.2 million barrels per day (bpd) since September had stabilized the market, he said on Tuesday.
"After our previous decision, it has not kept slowing down," Shahristani said.
U.S. crude has fallen by more than $110 from its July peak to trade at under $37 a barrel on Tuesday. Oil has mostly traded in a $35 to $45 range since December.
The price may begin to recover by the end of the year, Shahristani said. He had said previously that $70 was a fair price for oil.
Iraq, dependent on oil income for cash desperately needed to rebuild its shattered economy, has been forced to cut its budget due to the slump in prices.
Compliance from OPEC members with agreed cuts was "good enough," Shahristani said.
Iraq is exempt from OPEC supply quotas after years of sanctions and war.
OPEC met only two-thirds of the pledged cuts in January, according to a Reuters survey.
Oil Law, Contracts
A number of issues were holding up a new oil law in Iraq, Shahristani said.
The legislation has been delayed with feuding politicians for years, and is keenly awaited by foreign oil companies planning to invest in Iraq.
The law would establish a framework for investment in the energy sector, which needs billions of dollars of work to overhaul infrastructure and boost output.
Shahristani has pushed ahead with a bidding round for oil service contracts for work on Iraq's biggest fields to be signed under existing legislation.
The model contract for those deals was being revised after a three-day workshop between Iraqi oil officials in Istanbul last week, he said.