The meeting between OPEC and non-OPEC oil producers on an agreement to freeze output ran into last-minute trouble due to what looked like a new spike in tensions between Saudi Arabia and Iran, sources told Reuters.
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Sunni-ruled Saudi Arabia has said it won’t back any freeze if Iran, its Shiite rival, doesn’t agree to it, throwing into question whether any deal will be reached.
More than a dozen nations inside and outside the Organization of the Petroleum Exporting Countries have officially confirmed they would attend the meeting in Doha but the role of Iran has been the key issue overhanging the talks. It was not clear if Saudi Arabia would stick to this position at the talks.
“Iran will in no way give up its historic production quota”, Zanganeh said.
However, Iran, a key oil producer, said it would not attend the Doha oil meeting, dimming the hope that the gathering could roll out any substantial deal to help oil price rebound. Tehran says it needs to regain market share after the lifting of worldwide sanctions against it in January.
Deputy Crown Prince Mohammed bin Salman told Bloomberg in recent days that the kingdom would only restrain its output if all other major producers, including Iran, agreed to freeze their production.
Iran has been trying to raise its oil production to the levels before Western powers slapped economic sanctions on the Islamic Republic over its nuclear program.
OPEC said this week that Iranian oil production in March was 3.3 million barrels per day, up from 2.9 million in January, but still short of its pre-embargo level of around 4.0 million. “I want to say that we don’t expect any changes in the price in spite of the negotiations which are being conducted now with oil-extracting nations”, Siluanov told the US CNBC broadcaster Thursday.
Oil prices tumbled on Friday as traders bet that the meeting in Doha will yield no effective measures to curb the global oversupply.
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That strategy seems to be working, with U.S. and Canadian offshore shale rig count declining by more than 50 per cent in the past 12 months. The low it reached earlier this year was about $27 a barrel for Brent crude oil, one of the leading global market prices. The Prince also added that should the Kingdom wish, it could increase total production capacity to 20 million bpd.
