Saudi Arabia, the world’s largest oil exporter and de facto head of OPEC, helped quash an earlier effort to cap output at January levels during the April 17 meeting in the Qatari capital.
Crude futures cratered more than 6% at one point after a meeting in Doha on Sunday failed to yield an agreement to freeze oil production.
The Russian Energy Ministry says it’s ready to increase oil production and exports should Saudi Arabia go through with its threat to boost output after the failure of the Doha talks.
Zangeneh, talking to the state radio, said certain oil producers had been trying to prevent the removal of sanctions against Iran. This would support oil prices amid the supply glut in the Market.
Iran, another oil producing country, was noticeably left out.
Saudi officials have given mixed messages about whether they would be willing to agree to a freeze without a reciprocal commitment from Iran. Oil-producing countries are meeting in Qatar to discuss a possible freeze of production to counter low global prices, but Iran’s last-minute decision to stay home could dilute the impact of any agreement. He added that this was not only about oil for Saudi Arabia, it was equally about the regional politics.
While Halff now believes that a short-term spike in oil prices is off the table, he also argues that the majority of the recent rally in oil was more about fundamental improvements in the market than hopes of a freeze.
Oil prices tumbled in Asian trading as a result, with the price of both U.S. and London crude oil down more than 5 per cent. “This is mostly because in the lead-up to the meeting in Doha, many were bullish about the outcome”.
Bjarne Schieldrop, chief commodities analyst at Nordic corporate bank SEB said: “We don’t think there will be a deliberate and significant ramp up in oil production by the freeze negotiating countries as a effect of the fact the deal fell apart”.
But Venezuelan Oil Minister Eulogio Del Pino said prices could crash and that discussions needed to restart.
“While there are a number of factors that might curb oil supply in the short-term – including a strike in Kuwait and the quake in Ecuador – OPEC’s main problem is the relationship between Saudi Arabia and Iran and this problem is not going to go away”, O’Keeffe told AFP.