* Iran not being in freeze deal is setback - sources
* Extra Iranian output will not help market to rebalance
* Major producers still willing to meet in April
By Rania El Gamal and Alex Lawler
March 16 (Reuters) - Oil producers including Gulf OPEC members still support holding a meeting next month to discuss a deal to freeze output even without Iran, OPEC sources said, as political pressure to prop up prices increases.
On Monday, Russian Energy Minister Alexander Novak said after talks in Tehran that a deal could be signed in April and exclude Iran, which has the right to boost output after years of sanctions.
Kuwait, for example, has been arguing that all major producers need to be part of the output freeze.
While an exemption for Iran is not ideal, it is not a deal breaker, OPEC sources said.
“It’s a setback but it will not necessarily change the positive atmosphere that has already started,” said one OPEC source from a major producer, referring to Iran saying it will not join any freeze accord.
“There are still talks about a possible meeting between main producers,” the source said.
Brent crude was trading just under $39 a barrel on Wednesday, up from a 12-year low of $27.10 reached in January.
A prelimninary deal to freeze output at January levels, reached last month by Saudi Arabia, Qatar and Venezuela plus non-OPEC member Russia, has helped to support prices.
A second delegate from the Organization of the Petroleum Exporting Countries said not having Iran in the pact was not the perfect outcome but it was not the worst.
“If the others freeze and the Iranians are outside the agreement, it will not help the market unless the demand is very large,” this delegate said. “January output is already at high levels.”
Three OPEC sources told Reuters on Monday that OPEC and non-OPEC producers were likely to meet in mid-April in Doha.
“You can’t ignore all other oil producers. The meeting is likely to go ahead,” a third source said, adding that the April meeting is likely to discuss and finalise the details of the freeze deal. “We will not just meet for the sake of meeting.”
It was not clear which countries besides the original four would attend. Kuwait and the United Arab Emirates have both said they would also commit to the freeze if other major producers did, but they have not received an invitation yet.
The willingness of Iraq, the biggest source of OPEC supply growth in 2015, to join the deal is also important. Baghdad on Monday said the freeze initiative was acceptable, citing the hardship for producers caused by low prices. (Editing by Susan Thomas and David Clarke)