As the summit in the Qatari capital continued more than eight hours beyond its initially scheduled conclusion, discussions centered on the final wording of a rewritten draft to freeze output at “an agreeable level” as long as all OPEC countries and other major producers join, said three people with knowledge of the matter, who asked not to be identified because the talks were private.
Advertisement
Tehran had refused to stabilise production, seeking to regain market share after the lifting of Western sanctions against it in January.
” the meeting concluded that we all need time for further consultation and from now till June meeting in OPEC, all participating countries will consult among themselves and with others”. “While today’s lack of a freeze deal has no negative impact on balances – since Iran is really the only country likely to raise output substantially – it has a huge negative impact on sentiment especially as the deal had been hyped up so much”, she said.
Saudi Arabia began the “freeze” initiative immediately after Iranian sanctions were lifted with a meeting of oil ministers from Russia, Qatar and Venezuela in February in Doha.
The collapse of Sunday’s talks sent oil tumbling in early Asia trade, with prices sliding as much as seven percent in opening deals.
Oil prices rose from $26 per barrel to over $40 per barrel on expectations a deal would occur. Given the strong correlation between the oil price and equities, Asian markets are not looking like they will have a good start to the week.
Russian oil minister Alexander Novak called the Saudi demand “unreasonable” and said he was disappointed as he had come to Doha under the impression that all sides would sign the deal instead of debating it. Ahead of Sunday’s meeting, Iraq boosted its production to record territory of over 4 million barrels a day in March, and Kuwait pumped 3 million barrels a day with homes of reaching 4 million a day by 2020.
Oil ministers from 16 countries, representing about half the world’s output, gathered in Doha to try to stabilize the global market, the first significant attempt at coordinating oil output between OPEC and countries outside the group in 15 years.
That contradicted the statements of other Saudi officials, and it wasn’t clear how the kingdom would approach negotiations in Qatar.
Saudi Arabia is insisting that Iran, which was absent at the conference, must also agree to a production freeze before any deal can be reached.
Publicly, Saudi Arabia has taken a tough stance on Iran.
Advertisement
Saudi Arabia and its allies in the Arabian Gulf are opposing Iran on a number of fronts, including Syria where they back different factions in the civil war. The U.S., now a major producer because of shale oil, did not attend.
