Putin says Russian oil producers agreed to freeze output in 2016

Russian President Vladimir Putin said on Wednesday that domestic oil producers have agreed to keep this year's oil output in line with January levels, the first time he had given his view in public on a production freeze.

"On the whole, an agreement was reached that we will keep (2016) oil output at the January level," Putin said about the outcome of a gathering he chaired on Tuesday with Russian oil producers in the Kremlin.

After months of falling world oil prices, a preliminary agreement was reached in Doha in mid-February for Russia and several other major crude producers to freeze production, but until now Putin had not said publicly where he stood on the question of Russia steadying its output.

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That had left markets uncertain about the extent to which Russia's oil industry - in which the Kremlin wields outsize influence - would throw its weight behind a deal.

Oil prices have plunged more than 70 percent from a peak in June 2014, driven by global oversupply exceeding 1 million barrels per day.

The Russian economy shrank by 3.7 percent last year mainly due to cheaper oil, which together with natural gas accounts for half the state budget. International sanctions over Moscow's role in the Ukrainian crisis have also hurt the economy.

Data showed on Wednesday that Russia's oil output in February was unchanged month on month, at 10.88 million barrels per day.

Oil markets gave a lukewarm reaction on Wednesday to Russia's pledge to freeze output.

Even after Putin's comments, uncertainty remains because Iran has not signed up to a production freeze, and a Putin aide said more work was needed to get all the big producers lined up.

"It was stressed that work with other large producing nations needs to be continued," Kremlin spokesman Dmitry Peskov said of the Kremlin meeting with top energy firms.

"There is still uncertainty about some other producers - some have joined (the Doha group) but there are countries which have not made their intentions clear enough," Peskov told a teleconference with journalists.

Iran is an obstacle to a global deal because it wants to ramp up production, capitalising on the lifting earlier this year of international sanctions that had been imposed over Tehran's nuclear programme.

Russian Energy Minister Alexander Novak said on Tuesday that Iran may be treated separately, on an individual basis, in terms of commitments to production.

Novak also said Russia planned to negotiate with other non-OPEC and OPEC nations for a potential meeting in March to try to agree a final decision on a freeze.