* Venezuelan oil min floated idea during producer tour
* Saudi Arabia warming to idea - source
* Iran seen as stumbling block, unlikely to agree-sources
By Rania El Gamal, Alex Lawler and Dmitry Zhdannikov
DUBAI/LONDON, Feb 11 Some OPEC countries are
trying to achieve a consensus among the group and key
non-members for an oil production "freeze", sources familiar
with the discussions say, in an attempt to tackle the global
glut without cutting supply.
Top exporter Saudi Arabia might be warming to the idea,
though it was too early to say whether the kingdom would give
its blessing because any deal depends mainly on a commitment by
Iran to restrict its plan to boost exports, the sources said.
The proposal of a production "freeze" at current levels was
floated by Venezuelan Oil Minister Eulogio Del Pino during his
tour of producing countries this month which included Russia,
Iran, Qatar and Saudi Arabia, they said.
"The Venezuelan oil minister wants to organise a meeting
before OPEC's June meeting if there is consensus on either a
production cut or at least a production 'freeze'," one source
familiar with the matter said.
"There is an ongoing discussion to meet soon for a freeze
deal. That's what's happening now," the source said, adding that
at least Russia and Qatar had given their initial agreement if
there were a consensus among other producers.
Oil prices began a slide from above $100 a barrel in
mid-2014, but the Organization of the Petroleum Exporting
Countries has declined to trim output without help from
non-members, which so far have refused to participate.
A production freeze could amount to a compromise in that it
would limit further increases in the supply glut that sent
prices to a 12-year low of $27.10 a barrel last month, while not
requiring countries to cut supply and give up market share.
Venezuela's proposal was also discussed in Riyadh during a
meeting with Saudi oil minister Ali al-Naimi and Del Pino on
Sunday, a second source said.
While the idea was met with openness by Saudi Arabia, talks
are still at an early stage and Riyadh will not commit unless
Tehran agrees to restrict supplies, the source said.
That appears to be a major stumbling block in the path of
any agreement. A source familiar with Iranian thinking, asked
whether a production freeze would gain much support in OPEC,
replied that it would not.
Iran is reluctant to restrain supply as it wants to recover
the market share it lost during sanctions that were imposed in
2012 because of its nuclear programme. The sanctions were lifted
With prices sinking further, senior officials from OPEC and
Russia have stepped up vague talk of possible joint action to
fix the supply glut.
Output of shale oil has slowed since OPEC's historic policy
shift of November 2014 not to cut supply in the hope that low
prices would curb competing production. But OPEC's own output
has surged, led by Saudi Arabia and Iraq.
Supply from OPEC is likely to climb further as Iran has
moved to restore relations with buyers, ordered a
500,000-barrels-per-day (bpd) rise in output and struck deals
with European and Asian customers.
An OPEC source said freezing production might be a temporary
compromise accepted by most producers that are already pumping
at near capacity, which would support prices, but Iran remained
the key to any deal.
"Everybody is already producing to their maximum capacity
now, except for Iran," the source said.
"If the Iranians are willing to stick to, let's say, the
rise of 300,000 bpd they said they have already committed to
Europe and if U.S. shale production has slowed, then yes, a
production freeze would be a positive sign to the market."
"It would help prices to recover," the source added. "But
this is a temporary solution and needs the will to make it
On Wednesday last week, Iranian news agency Shana quoted Del
Pino as saying six producing countries, including Iran and Iraq
and non-members Russia and Oman, supported a meeting to agree
steps to bolster prices.
Riyadh has said it was willing to cooperate on action to
stabilise the market as long as all OPEC members and key
non-OPEC producers joined in. Rising production by Iraq and
Iran's statements about boosting output were, sources say, the
main obstacles within OPEC to a deal.
Another OPEC source said an accord would be hard to reach.
"I doubt that there is an easy agreement because it would be so
sensitive for some countries," adding that OPEC and non-OPEC
would need to agree.
An OPEC delegate shared that view and said there was still
no concrete plan for a producer meeting.
"This would need to be an agreement between all producers,
not just OPEC," the delegate said of a production freeze. "If we
met without an agenda, we would not solve this problem of the
(Editing by Dale Hudson)