ENERGY

Qatar oil meeting ends without freeze

Saudi Oil Minister Ali al-Naimi, center right, arriving ahead of the oil-producers’ meeting in Doha, Qatar, on Sunday, April 17, 2016 (Photo: AP)

A deal to freeze oil output by OPEC and non-OPEC producers fell apart on Sunday after Saudi Arabia demanded that Iran join in.

The development will revive oil industry fears that major producers are embarking again on a battle for market share, especially after Riyadh threatened to raise output steeply if no freeze deal were reached.

Some 18 countries, including non-OPEC Russia, gathered in the Qatari capital of Doha for what was expected to be the rubber-stamping of a deal - in the making since February - to stabilise output at January levels until October 2016.

But OPEC's de facto leader Saudi Arabia told participants it wanted all OPEC members to take part in the freeze, including Iran, which was absent from talks.

Tehran had refused to stabilise production, seeking to regain market share after the lifting of Western sanctions against it in January.

After five hours of fierce debate about the wording of a communique - including between Saudi Arabia and Russia - delegates and ministers announced no deal had been reached.

"We need more time to reach an agreement among all OPEC members and main producers to freeze production, which can be by June," one OPEC source said.

The failure to reach a global deal could halt a recent recovery in oil prices.

"With no deal today, markets' confidence in OPEC's ability to achieve any sensible supply balancing act is likely to diminish and this is surely bearish for the oil markets where prices had rallied partly on expectations of a deal," said Natixis oil analyst Abhishek Deshpande.

"Without a deal, the likelihood of markets balancing are now pushed back to mid-2017. We will see a lot of speculators getting out next week," he added.

Brent oil has risen to nearly $45 a barrel, up 60 percent from January lows, on optimism that a deal would help ease the supply glut that has seen prices sink from levels as high as $115 hit in mid-2014.

Saudi Arabia has taken a tough stance on Iran, the only major OPEC producer to refuse to participate in the freeze.

Deputy Crown Prince Mohammed bin Salman told Bloomberg that the kingdom could quickly raise production and would restrain its output only if Iran agreed to a freeze.

 

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Last Update: Sunday, 17 April 2016 KSA 21:47 - GMT 18:47
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Qatar oil meeting ends without freeze
Oil-rich nations at Qatar summit say they need “more time” before agreeing to a production freeze
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