Discussions stumbled after Saudi Arabia and other Gulf nations wouldn’t agree to any deal unless all OPEC members joined including Iran, which wasn’t present at the meeting, Russian Energy Minister Alexander Novak told reporters.
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But instead of a quick approval of a production freeze, the meeting of 18 oil-producing nations saw hours of debate and resembled the dysfunction of an unsuccessful meeting of the Organization of the Petroleum Exporting Countries in December that sent oil prices tumbling. “Firstly, in January OPEC members were pumping flat out, so any freeze would have been at maximum production levels, hardly a recipe to support the oil price”, he said.
The oil minister of Qatar, Mohammed Bin Saleh Al-Sada, said that the producers “need more time” to decide the outlines of the output freeze deal.
Nigeria has been in the forefront of trying to get a consensus among producers to freeze output as a slump in oil revenues has hit its public finances and currency. Analysts are already skeptical about the OPEC meeting.
Last week, before the Doha meeting, the U.S. Energy Department and the Paris-based International Energy Agency both reported that U.S. production was declining.
Iraq’s crude production, including from fields in the semi-autonomous northern Kurdish region, is now at a level of between 4.7 million barrels a day and 4.8 million barrels, Al-Nima said.
Iran, which is reviving oil exports after worldwide sanctions were lifted in January, ruled out any limits on its output before reaching pre-sanctions levels, dismissing the notion of joining the freeze as “ridiculous”.
At around 0600 GMT, U.S. benchmark West Texas Intermediate for May delivery was down US$1.70, or 4.21 percent, at US$38.66 a barrel, while global benchmark Brent crude for June lost 3.94 percent, or US$1.70, to US$41.40.
European stocks were slightly weaker on Wednesday as mostly well-received corporate news helped to offset sliding oil prices.
The market volatility appears driven in part by speculative investors, “oil tourists” who drive the price up and down on expectations about things like the Doha meeting, said Kit Juckes, a strategist at bank Societe Generale.
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Iran, which didn’t attend the meet, has made it clear that it will not cap production as it seeks to boost output post-sanctions. The group found that outside OPEC, output will decline by the most since 1992 as the USA shale boom falters.
