"The president will discuss the situation in the oil market on his trip to Saudi Arabia," one of the sources said on Wednesday.

"It is natural that two big producers discuss the market and issues that are of mutual concern regarding this," he added.

Iranian embassy sources in Riyadh said the Khatami trip was expected to take place in the second half of March.

It will be his first visit to Saudi Arabia, a traditional Gulf rival that now enjoys improved relations with Tehran. But ties on the oil front are strained between the two Opec heavyweights.

Saudi Arabia is a critic of Iran's baseline production level, accusing the Islamic Republic of reneging on earlier output cut pledges.

Tehran says it is justified in demanding a higher baseline level, citing a combination of factors including the need to cut production from its maximum capacity level in line with practices of other Opec members.

At stake is Opec efforts to launch new moves to revive oil prices. Without agreement among major Opec producers Saudi Arabia, Iran and Venezuela, the cartel is paralysed.

An Iranian source said the issue of Iran's baseline production would be on Khatami's agenda in Saudi Arabia if the issue is not resolved.

"Iran's (baseline) production would be part of the general discussions on the oil market," he said. "It is natural that this issue would be among all of the issues that will be reviewed," he added.

Taking the issue to top Iranian and Saudi political leaders could provide the breakthrough needed to reassure battered oil markets.

Iran wants Opec to recognise 3.925 million barrels per day (bpd) as the basis for its individual output reduction and nay future cuts, instead of the 3.623 million bpd judged by the media and independent analysts.

Sharp divisions over the issue were highlighted on Tuesday, when Opec delegates said the cartel's leading power, Saudi Arabia, wanted the Iranian baseline problem resolved before Opec could hold an emergency meeting.

Bickering over the subject is set against the backdrop of intense Kuwait efforts to convene an emergency meeting before Opec's next scheduled session in late March.

But it appears the fractious cartel will be hard pressed to take any concrete action before then. Erwin Arrieta, energy and mines minister of key Opec power Venezuela, said on Tuesday that no meeting was planned before March, despite Kuwait's calls for emergency talks.