But OPEC sources said the organisation had failed to agree on output policy and set a new ceiling. New Saudi Oil Minister Khalid Al-Falih met with counterparts on Wednesday from states in the Persian Gulf, as well as Nigeria and Venezuela.
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Russian Federation has overtaken Saudi Arabia to be China’s top supplier so far this year, while Iran has been gaining market share in Asia, with shipments to the region likely to have jumped 60 percent in May from the same month a year earlier. It says any such move must be accompanied with a country quota system.
The statement said: “The conference stressed that, given the current market conditions, the secretariat should continue to closely monitor developments in the coming months, and if necessary recommend to member countries to meet again and suggest further measures according to prevailing market conditions”.
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. However, attempts to impose production ceilings have foundered over recent years, with countries ignoring them and producing as much as they wanted or could. “That would be one of the priorities to go forward”, Barkindo told reporters.
The decision to leave output unregulated extends OPEC’s run of failing to agree on the amount of gas its members should pump to more than 10 years, raising question about both the relevance and functionality of the cartel. The West African country will be OPEC’s smallest member.
Crude prices have rebounded from their January lows of under $30, and last week briefly pushed past $50 a barrel for the first time this year. Iranian leaders may believe that a sustained period of low oil prices will hurt their Saudi rivals more than it will hurt themselves.
Zanganeh made a few conciliatory remarks, saying he was happy with the meeting and received no signals from other producers that they planned to increase output.
Analysts still took away positive aspects from the meeting in Vienna, as Saudi Arabia showed restraint. “There is no reason to expect that Saudi Arabia is going to go on a flooding campaign”. “OPEC is alive, OPEC will be a very important segment of the economy of the world”.
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“Expectations around today’s OPEC meeting are quite low, with some speculation about the potential for some form of quota or freeze, but the likelihood is that nothing will change”, CMC chief markets analyst Michael Hewson said.
