A meeting between 18 oil producing countries on Sunday in Doha, Qatar appears to be hitting an impasse with prospects dimming about an accord being reached that freezes oil production levels at January highs.
Notably absent from the oil meeting is OPEC member Iran whose oil minister has recently expressed reluctance about Iran entering into an agreement about freezing oil production at January levels when Iran was beginning to shake off its international sanctions and resume its oil production capacities.
On Friday Iran’s Oil Minister Bijan Zanganeh reported that Iran would skip Sunday’s oil meeting in Doha.
Since January Iran has been laser focused on reestablishing itself in the global oil market to make up lost market share after international sanctions reduced Iran’s oil production levels to 2.7 million barrels per day.
Influential OPEC member Saudi Arabia, a rival of Iran, isn’t showing any willingness to enter into a new accord without Iran’s participation at the Doha oil meeting and coordination with the proposed freeze at January levels.
Also attending the Sunday meeting in Doha is non-OPEC member Russia, a major global oil producer whose willingness to go along with proposed freeze is crucial.
Today Iran’s news agencies Fras and Tehran Times reported that Venezuela’s Foreign Minister Delcy Rodriguez told Iranian Foreign Minister Mohammad Javad Zarif on Saturday that Venezuela respects Iran’s claim for its share in the global crude market.
“In talks between Caracas and members of OPEC (Organization of the Petroleum Exporting Countries), we have always recognized Iran’s right to return its oil production ceiling to the previous figure” said Venezuela’s Foreign Minister Delcy Rodriguez.
Iran is believed to be targeting the production of 4 million barrels per day after climbing to 3.23 million barrels per day in March.
Crude oil has rallied since news emerged about today’s oil meeting as expectations grew stronger that a new accord would be reached.
Crude oil has risen 60 percent to over $42 a barrel since oil prices tumbled to $27.00 a barrel in January.
With prospects fading for an oil accord to be reached at the Doha meeting, crude oil prices are expected to fall again due to a glut in crude oil and major oil producing countries having difficulty freezing oil production levels.
On April 14th, the International Energy Agency (IEA) reported that growth in global oil demand will ease to around 1.2 million barrels per day in 2016, below the 1.8 million barrels per day in 2015.