Iran says Saudi crude increase will not change market (Reuters)

TEHRAN (Reuters) – An increase in crude output by Saudi Arabia will not change market conditions as demand is for lighter oil than it provides, Iran's OPEC governor was on Saturday quoted as saying, reiterating Tehran's stance that there is no need to boost production.

At a meeting in Vienna this week, OPEC failed to agree on an increase in production, which consuming countries wanted and which leading exporter Saudi Arabia pushed for, because other producers, including Iran, said they feared prices could tumble.

Saudi Arabia will raise output to 10 million barrels per day in July from 8.8 million bpd in May, Saudi newspaper al-Hayat reported on Friday, as Riyadh proceeds outside official OPEC policy.

Mohammad Ali Khatibi told the Iran newspaper that the three countries that supported an output increase -- Saudi Arabia, Kuwait and the United Arab Emirates -- had done so under U.S. pressure.

"There is currently absolutely no shortage in the market, and consequently there is no need to raise production," he said. "Raising supply in the absence of demand would amount to an interference in the market flow."

"These three countries can only raise the production of heavy and sour oils, while the market will only absorb increased production if it is of light category as there is no demand for heavy oil in the market.

"The absorption of heavy oil as feedstock by refining establishments would require a change in the refining mode and investment which is costly and time consuming and something which they won't do. They (the market) are awaiting the return of Libya's crude of (the) light category," Khatibi said.

Iran, which holds the rotating presidency of OPEC, has suggested holding an emergency meeting before the group is due to meet again in Vienna in December.

(Reporting by Hashem Kalantari; writing by Robin Pomeroy; editing by Patrick Graham)

Saudi calls for greater role in IMF on Lagarde visit (Reuters)

JEDDAH (Reuters) – Saudi Arabia will seek a greater role in the International Monetary Fund (IMF), its finance minister said on Saturday after meeting with France's Christine Lagarde on her campaign to head the Washington-based lender.

French Finance Minister Lagarde is the frontrunner for the job left vacant by the resignation of compatriot Dominique Strauss-Kahn, but she is working hard to persuade emerging powers angry that another European is being appointed.

"Saudi Arabia plays an important role in the world economy and so we will call for strengthening the kingdom's role and share in the IMF," Ibrahim Alassaf told reporters in Jeddah after the pair met.

He also called for an increase in the number of Saudis working in leadership roles in the IMF.

The kingdom has a 2.81 percent share in the fund, according to the IMF website. This compares with the U.S. which has the largest share of 16.78 percent.

Lagarde is backed by the European Union and a handful of smaller countries from Georgia to Mauritius and is hoping for support from China and the United States that would all but guarantee her the job.

South Africa's Trevor Manuel ruled himself out of the race for the job on Friday, making Lagarde an even firmer favorite, although she remains under threat of a judicial inquiry in her home country.

Her main remaining international competition is from Mexican central bank chief Agustin Carstens.

DEBT FOCUS

Lagarde said she would make tackling sovereign debt troubles a priority for the IMF if appointed.

"There are specific issues to deal with and clearly some of the sovereign debt crisis issues are one of the priorities at the moment," Lagarde told Reuters earlier on Saturday.

"I will certainly look at one of the purposes of the fund which is to restore stability."

Lagarde said that the IMF should also support countries affected by the pro-democracy protest movement sweeping North Africa and the Middle East.

"If I were elected I want to participate as closely as possible, bringing the special expertise of the fund in order to help out those countries together with the bilateral support that is given by specific countries such as Saudi Arabia," she said.

Riyadh has pledged $4 billion in aid to Egypt and was also instrumental in a $20 billion handout to Bahrain and Oman for job-creating projects.

One potential pitfall for Lagarde is a legal investigation into her role in a 2008 arbitration payout to a French businessman.

A top French court on Friday put off until July 8 its decision on whether to open a formal inquiry into allegations by opposition left-wing deputies that she abused her authority in approving a 285 million-euro payout to a businessman friend of President Nicolas Sarkozy.

(Reporting by Asma Alsharif; Writing by Jason Benham; Editing by Brian Love and Patrick Graham)