Oil producers, both OPEC and non-OPEC members are to hold talks regarding the oil prices on April 17 in the Qatari capital Doha, said Mohammed Bin Saleh energy minister of Qatar. Three members of the OPEC however denied having received any invitation. No date for the meeting has been finalized yet, Bloomberg reported citing two people close to the matter.
According to a statement by Mohammed Bin Saleh who is also the president of OPEC presently: ”This comes as a follow-up to the meeting that was held last month in Doha between Qatar, Saudi Arab, Russia and Venezuela at which they proposed an accord to freeze oil output at January 2016 levels and called on other producers to do so.”
Last month, Russia and Saudi Arabia – two of the world’s largest oil producers held talks regarding the oil glut taking an adverse toll globally. The meeting held in Doha between Saudi Arab- the de facto leader and Russia resulted in freezing the oil production at January levels, which was mutually consented by the oil producers. Venezuela persuaded Iran, Russia, and Saudi Arab to hold discussions regarding oil production so as to mitigate the imbalance between demand and supply in the oil market. Crude prices surged following the meeting on Feb 16.
So far, around 15 oil producers- OPEC and non-OPEC, that contribute about 73% of the global oil production are supporting the cutting back of supply. Ali al-Naimi, Saudi Arab’s oil minister and Alexander Novak of Russia will hold talks on phone on Wednesday, a source told Bloomberg.
Political pressure to increase crude oil prices has built up on the oil producers and thus the meeting will go ahead even without the support of Iran, according to OPEC sources. Kuwait however objected to this expressing that all major oil producers should be part of the meetings that is to be held next month.
The depressed crude oil environment is largely owing to the oversupplied market and the slow growth in demand. Iran not being part of the talks will not be ideal as the oil rich giant possesses a major share in the global oil output. After the sanctions on Iran have been uplifted, it wants to boost its oil production to pre-sanction levels. Until then, the oil rich nation is not up for any output cuts. “I have already announced my view regarding the oil freeze and I’m saying now that as we have not reached four million in production, they should leave us alone. When we reach this level of production, we can then co-operate with them,” Mr. Zanganeh, Iran’s Oil Minister said on Sunday.
On the other hand, OPEC sources believe that Iran not joining to cut back output levels is not a deal breaker. "It's a setback but it will not necessarily change the positive atmosphere that has already started," said one OPEC source from a major producer.
On Monday, Mr. Zanganeh met Mr. Novak in Tehran to discuss a separate oil and gas swap deal. Mr. Novak expressed that major oil producers should come together to stabilize the oil prices. However, he expressed that he understands Iran’s position “to increase production and revive its share in the global markets” as its production suffered extensively when the sanctions were imposed.
Oil prices have sunk around 70% since peaking at $115 per barrel in June 2014. As of now, with oil prices trading below $40 a barrel- Brent currently trades at $39.22 per barrel, while West intermediate Texas trades at $36.97 per barrel, the oil companies are finding it very hard to cope up with the declining crude oil prices. As a result of the low crude oil prices, profit margins and the overall financial position of oil companies’ especially big oil are on the downhill with their shares plunging drastically.