Thus, Thursday’s meeting of the Organization of the Petroleum Exporting Countries in Vienna was closely watched for signs it may revive OPEC’s group output ceiling, as proposed by Saudi Arabia, or introduce individual member production quotas, as suggested by Iran.
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“We need to have a country quota but I don’t believe it will happen at this meeting”, he said, adding the meeting would focus on choosing a new OPEC secretary general.
“We will be very gentle in our approach and make sure we don’t shock the market in any way”, Falih told reporters.
It has taken some time – straining even Saudi Arabia’s finances, to say nothing of on-the-brink OPEC member Venezuela – but the tactic now appears to be working at last.
The U.S. bank said that “fueled by the lower prices, oil consumption around the world is booming on less efficient use, less substitution effects, and more economic demand”.
Tensions between the Sunni-led kingdom and the Shi’ite Islamic Republic have dominated several previous Opec meetings.
Asked whether he was happy about how OPEC manages production policy, Barkindo said there was room for improvement.
The Saudi proposal jars with Iran’s bid to regain its market share through stepped-up oil production but Riyadh has said it would commit itself to a freeze plan only if Tehran joined it.
Animosity between Saudi Arabia and Iran – bitter regional OPEC rivals engaged in proxy conflicts in Syria and Yemen – means that any agreement to cut output is highly unlikely in any case.
Teheran argues it should be allowed to raise production to levels seen before the imposition of now-ended Western sanctions over Iran’s nuclear programme.
OPEC did reach two lower-profile agreements. Half of the participants expect West Texas Intermediate crude to trade at $40 to $50 per barrel at the end of 2016, while 45 percent see oil above $50.
The main takeaway from Thursday’s event is that nothing has really changed since the December OPEC meeting, which effectively imposed no restrictions on members at all.
For decades, the 13-nation cartel was able to regulate prices by throttling or increasing production.
Thursday’s summit follows a recovery in oil to nearly $50 a barrel from below $30 in January after depressed prices took their toll on supplies. But according to 55 percent of those surveyed, the resumption of USA drilling is unlikely to move oil prices from the current range.
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The Saudis blame Iran for the failure of the Doha talks; Iran at the time had increased its output by about 500,000 barrels and was headed to a total post-sanctions increase of one million barrels.
