While Saudi Arabia had shown willingness to mend divisions Thursday with cash-strapped members demanding a new group ceiling, Iran said it would only support individual country quotas that would be hard to agree in a single meeting.
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Brent crude oil futures for delivery on August 1 dipped below the $50-per-barrel mark to trade Thursday at $49.25, down 47 cents, or nearly 1%, on their Wednesday close.
West Texas Intermediate, the US oil-price gauge, fell 1.45 percent to $48.30. He insisted Tehran deserved a quota – based on historic output levels – of 14.5 percent of OPEC’s overall production. The last time the group cut gas output by its members was in December 2008.
OPEC’s meeting in Vienna has ended with officials from the 13-nation cartel, which produces one third of the world’s oil, unable to agree on limiting supply.
Until December 2015, OPEC had a ceiling of 30 million bpd – in place since December 2011, although it effectively abandoned individual production quotas years ago.
It added that member countries “confirmed their commitment to a stable and balanced oil market, with prices at levels that are suitable for both producers and consumers”.
Mohammed Barkindo was appointed as a nes secretary-general of the Organization of the Petroleum Exporting Countries (OPEC).
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.
Oil prices fell Thursday on news of the failed deal.
But Iran, which is regaining its heavyweight status now that United States sanctions have been removed, says an output ceiling is of no interest to its market strategies.
Zangeneh discussed issues of mutual interest with his counterparts on the sideline of the OPEC meeting.
Despite rising output by OPEC’s Middle Eastern producers, the group’s overall production has remained largely flat this year, now standing at 32.5 million barrels per day (bpd), capped by disruptions especially in Nigeria, Libya and Venezuela.
Investors who plan to buy shares in the company “must accept” that Saudi Arabian Oil Co. will keep some of its production in reserve, Khalid Al-Falih told reporters in a briefing in Vienna on Thursday.
But determination to break the sense of drift inside Opec is being undermined by the fact that market forces have driven up the value of benchmark Brent blend to about $50 per barrel.
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As a result, prices crashed to $27 per barrel in January, their lowest in over a decade, but have since recovered to around $50 due to global supply outages. “If everybody freezes, Iran will freeze like everybody else”, he said.
