Iran wants OPEC to cut 1.5 million barrels

Iran called on OPEC Saturday to cut production by a further 1 million to 1.5 million barrels per day when it meets in Cairo later this month, state television's Web site reported Saturday.

Iran's OPEC governor, Mohammad Ali Khatibi, said the cartel needs to act to slash output because demand for oil has declined due to the global financial meltdown.

OPEC, which produces about 40 percent of the world's crude oil, decided to cut production by 1.5 million barrels a day last month in response to a dramatic fall in oil prices from a record $147 in July to below $70 last month.

Despite the cut, oil prices have continued to decline. Light, sweet crude for December delivery fell $1.20 to settle at $57.04 a barrel on the New York Mercantile Exchange Friday.

Diving prices have forced OPEC to plan an extraordinary meeting in Cairo, scheduled for Nov. 29, to discuss the plunge.

"It would be better that, at the urgent meeting in Cairo, it (OPEC) decides to slash production by a further 1 to 1.5 million barrels per day in order to create a relative balance between supply and demand," Khatibi said.

Iran is afraid of the consequences of falling oil prices on its ailing economy. About 80 percent of Iran's public revenues come from oil exports and Iran's oil industry needs foreign investment to keep up production and export.

Khatibi said the continuing decline in oil prices means there is oversupply.

"The continuing fall in prices and increase in oil reserves by big industrial states shows there is oversupply. ... OPEC members have to remain committed to their quota obligations otherwise prices will keep diving," he added.

Iran, as OPEC's second largest oil exporter, has traditionally opposed any crude output increase by members, arguing that it would cause a fall in prices. It has also urged fellow OPEC members to respect their output quota to avoid a worsening of the oversupply.

Iran produces about 4 million barrels of oil per day. The country's recoverable oil reserves are estimated at 137 billion barrels -- or 12 percent -- of the world's overall reserves.

Iran also has the world's second largest natural gas reserves, estimated at 28 trillion cubic meters.