The development will revive oil industry fears that major producers are embarking again on a battle for market share, especially after Riyadh threatened to raise output steeply if no freeze deal was reached. It produces 3.2 million barrels of oil a day now, with hopes of increasing to 4 million by April 2017.
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Altogether 23 countries, both within and outside the Organization of the Petroleum Exporting Countries (OPEC), sent their delegates to the Qatari capital for the “Oil-Producing Countries Ministerial Meeting”.
Brent crude oil is now trading at $43.10 per barrel, up from a low of $29 in January but still well below the price of $110 which was typical in the first half of 2014. Saudi Arabia and other Gulf nations reportedly would not agree to any deal unless all OPEC members joined in, including Iran.
However, informal meetings were said to have taken place over a revised draft agreement, but a report by Reuters, who said it had seen the new wording, spoke of it being a “soft freeze” that would limit production to “an agreeable level” rather than the current level.
Most members of the Opec producers’ group, plus other oil exporters including Russian Federation, attended the talks.
“The general conclusion was that we need more time to consult among ourselves in OPEC and non-OPEC producers”, Qatar’s Energy Minister Mohammed bin Saleh al-Sada said after a meeting that had gone on for over 12 hours without reaching a final agreement.
Heading into the Doha meetings, speculation was what would happen between Mideast rivals Saudi Arabia and Iran.
Opinion had been split over whether a deal on Sunday would be enough to tackle the global oversupply, which is also down to slowing demand in major consumer China and burgeoning USA shale production. The kingdom seems determined to ride out the low prices that could squeeze Tehran.
Although Saudi oil minister Ali al-Naimi arrived in Doha on Saturday, his Iranian counterpart Bijan Zanganeh stayed in Tehran.
That dispute underscores the level of discord inside OPEC as it faces arguably its biggest challenge since the oil glut of the 1980s. The inability to reach consensus will lead to a “severe” drop in prices, Citigroup Inc. predicted before the meeting. Western markets were closed Sunday and not immediately affected.
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The idea was that a freeze would help put a floor under crude prices, which have risen from $26 per barrel in February to above $40 on expectations that a deal would happen.
