OPEC producers and Russia may reach deal on output freeze without Iran
Russia and major OPEC oil-producers are going ahead with a meeting next month to discuss freezing their output in a bid to stabilize the world price of oil. They are ready to do so without Iran’s participation.
Participating OPEC members also believe the oil producers can reach a deal without Iranian participation. “It’s a setback but it will not necessarily change the positive atmosphere that has already started,” explained one OPEC source to Reuters on Wednesday.
“There are still talks about a possible meeting between main producers,” the source added.
The reason Iran is reluctant onto a deal to halt output at January levels is due to the fact that its oil has only recently begun reentering the market since US and European sanctions against Tehran were lifted this January as part of the nuclear deal. Tehran wants to boost its current output to pre-sanctions levels (approximately 4 million barrels a day) before applying a freeze.
Russia’s Energy Minister, Alexander Novak, explained on Monday that they may even reach a deal without Iran. Russia and Saudi Arabia are the main proponents of this freeze initiative and reached agreement with Qatar and Venezuela last month to freeze prices. Kuwait and the United Arab Emirates have said they will also freeze production levels if the major oil producers did so, they have not yet been invited to next months meeting.
Iraq has agreed to the freeze saying that it has endured quite a lot of hardship given the steep fall in the price of oil, a resource it is heavily dependent on, as it struggles to combat the threat posed by Islamic State.
Participating OPEC members also believe the oil producers can reach a deal without Iranian participation. “It’s a setback but it will not necessarily change the positive atmosphere that has already started,” explained one OPEC source to Reuters on Wednesday.
“There are still talks about a possible meeting between main producers,” the source added.
The reason Iran is reluctant onto a deal to halt output at January levels is due to the fact that its oil has only recently begun reentering the market since US and European sanctions against Tehran were lifted this January as part of the nuclear deal. Tehran wants to boost its current output to pre-sanctions levels (approximately 4 million barrels a day) before applying a freeze.
Russia’s Energy Minister, Alexander Novak, explained on Monday that they may even reach a deal without Iran. Russia and Saudi Arabia are the main proponents of this freeze initiative and reached agreement with Qatar and Venezuela last month to freeze prices. Kuwait and the United Arab Emirates have said they will also freeze production levels if the major oil producers did so, they have not yet been invited to next months meeting.
Iraq has agreed to the freeze saying that it has endured quite a lot of hardship given the steep fall in the price of oil, a resource it is heavily dependent on, as it struggles to combat the threat posed by Islamic State.