The much-anticipated Doha meeting of 18 oil-producing countries, including 11 from OPEC and Russia, collapsed with no agreement on a proposed output freeze after 12-hours of talks. Qatari oil minister Mohammed al-Sada, who addressed the gathered journalists, said that the parties “needed time for further consultation” and attributing the length of the meeting to the “many scenarios we looked at.”
Russian oil minister, Alexander Novak, did not attempt to hide his disappointment, when in a separate briefing he told the reporters that a number of OPEC countries changed their position and demanded that all OPEC countries and large exporters outside OPEC joined the freeze” despite an initial agreement that excluded Iran. It is believed that it was Saudi Arabia’s insistence on all OPEC members complying with the freeze ultimately broke up the talks.
Iran’s oil minister Bijan Zanganeh, who did not attend the meeting, made it clear that his country would under no circumstances agree to production freeze, pointing out that “if Iran freezes its oil production, it cannot benefit from the lifting of sanctions,” and that OPEC and non-OPEC producers should accept the “reality of Iran’s return to the oil market.” As Iran readies itself to regain its position among crude producers, it is already well on the route of reaching a daily production target of four million barrels, its pre-sanctions level. In March, the country managed to produce 3.3 million barrels per day – nearly 400,000 barrels higher than at the start of the year.
Commenting on Iran and its absence at the negotiating table, Mohammed al Sada said, “We respect their position and through further consultation, we don’t know how their future will unroll. It was a sovereign decision by Iran. A freeze would definitely be more effective if OPEC and non-OPEC producers cooperated.” He also added that oil market fundamentals are “improving,” and prices are “heading in the right direction.”
“How long [the market] will take to balance itself, we are yet to see,” he said. “It is certainly in the right direction.”
According to Forbes, the failure to reach a decision on production freeze will herald a bearish period with more volatility with oil futures before excitement starts to build again before the next scheduled OPEC meeting in Vienna in on June 2nd.
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