Iranian Oil Minister Bijan Namdar Zangeneh met counterparts from Venezuela, Iraq and Qatar in Tehran for over two hours, after which he welcomed the initiative to set a “ceiling” as a first step toward stabilizing the market.
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Iran says it’s “illogical” for the nation to join the oil output freeze that was agreed upon on Tuesday by a Saudi-Arabian and Russian led group, reports BBC News.
Two non-Iranian sources close to the OPEC discussions told Reuters Iran might be offered special terms as part of an output freeze deal. “A storm late in the month [in eastern US states] likely held down production in January by a small amount”.
Iran exported around 2.5 million barrels per day (bpd) of crude before 2012, but sanctions, imposed by world powers to curb Tehran’s nuclear program, cut its oil shipments to about 1.1 million bpd.
“The decline in oil prices will have a marked and lasting impact on Saudi Arabia’s fiscal and economic indicators given its high dependence on oil”, the ratings agency said in a statement.
The last global deal, involving OPEC and non-OPEC producers, dates back to 2001, when Saudi Arabia persuaded Mexico, Norway and Russian Federation to contribute to production cuts, although Moscow never followed through and raised exports instead.
Even with Iran’s cooperation, it was unclear if the Doha plan would be enough to put a floor under prices.
The energy ministries of Russia, Qatar, Saudi Arabia and Venezuela didn’t immediately respond to requests for comment.
Those hopes were dashed when Russian Federation and Saudi Arabia agreed to freeze output at January’s levels instead.
“This is more of a symbolic announcement since it made no sense for those countries to increase production and drive prices to the ground to begin this”, he added.
Brent crude gained 3% in London trading this morning to trade at around 34.50 while West Texas Intermediary futures were up 2.2% changing hands at 30.40.
Iran’s proved oil reserves stood at 157.8 billion barrels at the end of 2014, according to BP. The country produced 2.925 million barrels per day in January compared to 2.887 million barrels per day in December, 2015.
Asian stocks mostly posted strong gains on Thursday as a rebound in the price of oil and solid USA manufacturing data boosted European and US markets.
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“It could pave the way for further action to be taken should the likes of Saudi Arabia, other OPEC members and Russian Federation deem it necessary”, FGE said.
