Saudi Arabia and Russian Federation have reached a deal to freeze oil output at January levels in an effort to counter the prolonged fall in oil prices because of global oversupply, but the deal hangs on whether Iran and other OPEC members will take part.
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The Islamic Republic of Iran says the Organisation of Petroleum Exporting Countries (OPEC) is illogical with its request for Iran to freeze production at January 2016 levels.
Oil prices were higher on Wednesday morning as OPEC oil ministers traveled to Iran to talk about a possible production freeze between global oil producers.
“We look forward to the beginning of cooperation between OPEC and non-OPEC countries and we support any measure that can stabilise the market and increase prices”, he was quoted as saying by the ministry’s news service, Shana.
Iranian Oil Minister Bijan Zanganeh 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 towards stabilising the market.
Freed from sanctions, Iran ramped up its production to almost 3 million barrels a day in January, up 80,000 over December.
Oil prices were likely to remain volatile, Mr Spooner said, as traders and investors reacted to news and rumours about curbs on output growth and possible cuts in production. In Russia, the world’s biggest producer, the rouble hit an all-time low last month while in Venezuela and Azerbaijan low prices have taken a severe toll on local economies and import ability.
Among the hardest to bring on board is Iran, which has already announced Tehran has no intention of freezing oil output levels.
“Iran has just started boosting production after sanctions were lifted and is unlikely to commit to maintaining output at current low levels”, the note added.
Venezuela, Russia, Saudi Arabia and Qatar on Tuesday agreed to freeze production, after Venezuela unsuccessfully sought a cut in production among OPEC members.
“These countries increased their production by 4 million barrels when Iran was under sanctions”, Asali told the Shargh daily newspaper. U.S. crude traded at Dollars 30.51 a barrel, up USD 1.47, also near the highs of the day.
Oil’s rise encourage both stock markets and the Canadian dollar, which was up three quarters of a cent at 72.92 cents U.S. at mid-afternoon, after rising to 73.15 cents USA earlier in the day.
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One source said that Iran had returned to the market and needed a special chance but also needs to make calculations.
