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Iran's central banker dismisses idea of output cut

Doha, Qatar prepares to host the Oil Producing Countries Ministerial Meeting on Aug. 17th, 2016.
Justin Solomon | CNBC
Doha, Qatar prepares to host the Oil Producing Countries Ministerial Meeting on Aug. 17th, 2016.

Iran's top central banker is adding to growing doubts about an agreement to freeze output at a meeting of oil producers in Doha, Qatar on Sunday.

Ahead of a pivotal meeting that may determine the near-term outlook for crude prices, Iran on Saturday announced that it would not participate in the conference. The country, still trying to recover from Western sanctions, is seen trying to preserve market share, and has steadfastly resisted any suggestions that Iran should freeze or curb output in order to prop up prices.

On the sidelines of an International Monetary Fund meeting in Washington, D.C., Valiollah Seif, head of Iran's central bank told CNBC that asking Iran to freeze output right now is unfair.

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"What Iran is doing right now is trying to get back and secure its share of the market," Seif said, adding that "what Saudi Arabia is asking Iran to do is not a very fair [or] logical request."

On several occasions, the leadership of Saudi Arabia has repeatedly said they would agree to an output freeze as long as Iran did too. Currently, analysts believe the two rivals are unlikely to reach a near-term consensus.

Seif told CNBC that Iran, as a member of OPEC, has a quota of 2.4 million barrels per day. Under sanctions for its nuclear program, that quota went unfilled. At the same other members used their output to fill the gap.

"And right now, Iran is trying to just take back the quota it is entitled to get, so we are going to do that and this is the main direction of our economy," Seif added. He went as far as to say other OPEC members are to blame for the sharp fall in oil prices, which are down more than 37 percent year to date.

"This request is coming from those countries which are responsible for this surplus production in the market, because they have exceeded output beyond their quota, and I think this is not fair," Seif added.

He cautioned that this was his personal viewpoint, and the ultimate decision lies with Iran's oil minister, Bijan Zangeneh.