Oil production freeze 'the only way' to tackle falling prices, Iraq says

Persistently low oil prices have wreaked havoc on economies reliant on oil

Smoke rises as Iraqi security forces and allied Popular Mobilization Forces shell Islamic State group positions at an oil field outside Beiji, Iraq, in October 2015. (AP)

The biggest oil producers in the world must reach an agreement to freeze production to stop the oil price falling again, according to the head of Iraq's state oil-selling company.

Falah Alamri, the director of the Oil Marketing Company, told the Financial Times that oil producers need an agreement when they meet in Qatar on April 17.

"They should do this deal because it is the only way to support the oil price," Alamri told the FT in Switzerland. "Everybody needs it and Iraq supports this deal."

Supporters of the deal hope that by freezing production, countries will stop the oil price from reaching new historic lows. Prices have fallen more than 60 per cent from $115 in June, 2014, to around $42 a barrel at current prices.

Persistently low oil prices have wreaked havoc on economies reliant on oil.

In February, Saudi Arabia reached an agreement with Russia to freeze production but insisted that no freeze would be put in place unless other producers in the Organization of Petroleum Exporting Countries agreed to co-operate.

Iran has so far rejected a freeze. It wants to increase production up to levels traded before it was hit with sanctions.

Mr Alamri said Iran has the “right” to increase production to pre-sanctions levels.

There have since been suggestions that Saudi Arabia may agree to a freeze without the agreement of Iran.