Saudi Arabia said to offer oil cut if Iran freezes output

Saudi Arabia has offered to cut its oil production if Iran freezes its own output at 3.6 million barrels per day (bpd) as part of the kingdom’s efforts to strike an OPEC deal to curtail supply and support prices, Reuters reported on Friday, citing unnamed sources familiar with the matter.

Iran is still weighing the offer which was made this month, the report added.

An informal meeting will be held in Algeria from September 26 to 28 for OPEC countries to help stabilize the oil market. The meeting will be joined by Russia, which is not a member of OPEC. The group will also have a formal gathering in Vienna at the end of November. 

"Our goal is to reach a consensus and look at different scenarios for the production levels of the OPEC countries. We are looking forward to a credible and transparent solution which would lead to market stability," a source familiar with Saudi oil thinking told Reuters. 

Meanwhile, a source familiar with Iranian thinking declined to comment on details of the offer, adding that a compromise may be reached next week.  

There was no official comment from either Saudi Arabia or Iran. 

OPEC officials from Saudi Arabia and Iran met this week in Vienna but the kingdom's proposal was not discussed. The meeting rather focused on baseline production figures. 

Though the meeting produced no breakthrough, it would help build consensus, the Saudi sources added. 

Oil prices rose on the news that Saudi Arabia was proposing a deal to Iran but then dropped 4 percent as hopes of an agreement next week faded.