On Sunday, representatives from 18 major oil-producing countries met in Doha, Qatar to discuss a draft deal to freeze oil production amid falling energy prices.
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Oil sector employees sit in a hall during an official strike called by the Oil and Petrochemical Industries Workers Union over public sector pay reforms, in Ahmadi, Kuwait Qatar’s Energy Minister Mohammad bin Saleh al-Sada at the talks in Doha, Qatar.
Russia, that exports oil but no a member of OPEC (Organization of Petroleum Export Countries), also participated in meeting with OPEC members.
Oil Price Information Service Global Head of Energy Analysis Tom Kloza told Sputnik that the Doha meeting was doomed to failure in light of the rancor between Saudi Arabia and Iran as well as the ongoing projects to boost production and exports within OPEC.
The talks collapsed after Saudi Arabia surprised the group by reasserting a demand that Iran also agree to cap its oil production.
The talks followed a February agreement between Russia, Saudi Arabia, Qatar, and Venezuela to push for a production freeze in order to shore up prices by reducing a global supply glut.
Saudi Arabia willing not to freeze output until Iran agrees to freeze.
Meanwhile, earlier Iran’s Oil Minister Bijan Zanganeh said that the country didn’t contribute to the disbalance on the oil market, thus would not freeze its output. The shares have nearly doubled over the last month since it received a £13.55mln infusion of cash from London Oil & Gas that it intends to use on acquiring “complementary near term oil and gas developments and low risk production assets in the North Sea”. That would be an increase of about 800,000 barrels a day from March production. “We believe oil prices will rise to a sustainable level closer to $60, the new normal, not $100 and not $40 either”. Earlier, both had been even lower, with NY crude down 7 percent at one stage.
As well as the fall in Brent, the price of U.S. crude oil was down 6.8%, or $2.82 lower, at $38.68 a barrel.
“‘You’re going to get more Saudi crude seasonally in the summer and people could interpret that as countering extra supplies from other producers”, said Tchilinguirian. Heard on the Street’s Helen Thomas looks at what could happen next in oil markets.
Russian Federation – the world’s third-largest oil producer after Saudi Arabia and the United States – is not a member of OPEC.
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Negotiations between 16 oil producers in Doha ended without any agreement on limiting supplies, a diplomatic failure that threatens to renew the rout in prices. It would not have removed actual barrels from the market but it was meant to offer symbolic support to prices by encouraging hedge funds to focus on the gradual rebalancing of the underlying physical market.
