Major oil producers gathered in Qatar yesterday for crucial talks on capping production to boost prices, despite Iran’s refusal to take part.
Top energy officials from about 15 countries, including Saudi Arabia and Russia, were at the Doha talks, amid reports a draft agreement was in the works to freeze output at January levels until at least October.
NOSEDIVE
Photo: AP
Major producers both inside and outside the Organization of the Petroleum Exporting Countries (OPEC) are anxious to stem a market nosedive that has cost exporters billions of US dollars in lost revenues.
Officials held “consultations” in the morning and delayed the official start of the meeting to the afternoon, a member of the Ecuadorian delegation told reporters.
Ecuadoran Minister of Hydrocarbons Carlos Pareja told reporters that his country would support a plan to freeze output until at least October.
He said proposals under discussion also call for “setting up a committee to monitor the freeze.”
DAMAGING
Pareja said that if no action were taken “there will be huge damage to the oil industry.”
Russia’s RIA Novosti news agency also quoted Azerbaijani Minister for Energy Natiq Aliyev as saying the draft included the output freeze at January levels until October.
FOLLOW-UP
The meeting in Doha is a follow-up to talks in February between OPEC members Saudi Arabia, Qatar and Venezuela, plus Russia, in which they first mooted the output freeze.
Saudi Arabia has insisted that all major producers must be on board for the freeze to work, including fellow OPEC member and regional rival Iran.
SANCTIONS
However, Tehran, which has boosted production following the lifting of sanctions under its nuclear deal with world powers, has rejected any talk of a freeze.
Iran had initially said its OPEC representative would participate in the talks, but yesterday Iranian Minister of Petroleum Bijan Zanganeh said Tehran would not send a delegation at all.
MINOR IMPACT
Kuwaiti oil expert Kamel al-Harami said a freeze agreement was still possible without Iran.
“Iran is unable to add more than 500,000 barrels per day [bpd] to its production by the end of the year,” Harami said in Doha.
“I believe this will not greatly impact the meeting,” he said.
OPEC on Wednesday last week said that Iranian oil production last month was 3.3 million bpd, up from 2.9 million in January, but still short of its pre-embargo level of about 4 million.
OPEC said its members pumped 32.25 million bpd last month — with Saudi Arabia accounting for nearly one-third — up from an average of 31.85 million bpd last year.
COMPETITION
Saudi Arabia has refused to cut production despite the price fall, as it seeks to drive less-competitive players, especially US shale producers, out of the market.
However, pressure has been building as falling oil revenues hit state coffers, with Riyadh posting a record budget deficit last year.
STRIKE
Host country Qatar said “an atmosphere of optimism” spread on the eve of the meeting.
Kuwait acting-Minister of Petroleum Anas al-Saleh told reporters on arrival in Doha that “he was optimistic” about the success of the conference, which took place as thousands of oil workers in his country began an open-ended strike yesterday to protest against a government proposal to cut their wages.
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