Oil Freeze Deal: Iran’s Refusal Stalls Agreement Among OPEC Members
Addressing newsmen after the failed meeting of OPEC and non-OPEC oil producers meeting in Doha, Qatar, Kachikwu stressed that OPEC must work at achieving a workable consensus on the issue by bringing everybody on the negotiating table.
“We are just going to work at it. It is a supply and demand issue and we need to consult and bring everybody into the circle and thank God that a committee is now in place to try and work towards getting everybody on board,’’ he said.
He explained that once every member country of OPEC is brought on board, it would become easier to convince other major oil producers to sign-up to the freeze policy which is designed to remedy lingering decline in the price of crude oil in the international market.
The much hyped meeting had in attendance 18 countries which include Qatar, Kuwait, Oman, Saudi Arabia, Nigeria, Russia, Mexico, Ecuador, Trinidad and Tobago, Iraq, Mexico, Azerbaijan, Kazakhstan, Angola, Bahrain, Indonesia, Venezuela and United Arab Emirates, but talks failed after Iran insisted it won’t agree to production freeze.
It is expected that the consensus issue been canvassed by Kachikwu will be pursued vigorously in the next OPEC Ministerial Meeting slated for June, 2016 in Vienna, Austria.
Meanwhile, as oil prices tumbled yesterday after failure to reach a freeze deal, Iran has insisted it won’t sign deal, leaving industry watchers to opine that the credibility of OPEC is at stake.
Brent crude tumbled as much as 7 per cent earlier yesterday, but later steadied after a Kuwaiti workers’ strike slashed the country’s oil output by more than half.
According to Reuters report, the strike cut more than 60 per cent of Kuwait’s crude output, lending support to price benchmarks such as Brent and Dubai. Supply of refined oil product from the country also tightened due to scaled-back refinery runs and lower fuel exports.
“The material loss in production from the Kuwait strike has helped the oil market forget about the farce from Doha,” Director of Commodity Research at the New York-headquartered Clipperdata, Matt Smith, told Reuters.
Brent which had earlier fallen by $3 later gained by 20 cents, trading at $43.30 a barrel, while U.S. crude benchmark was off 31 cents, at $40.05 a barrel, after sliding to $37.61 at the day’s low.
This notwithstanding, Iran has urged other oil producers to continue talks on an output freeze to prop up crude prices, but insisted it was justified in not freezing its own output.
Iranian OPEC Governor, Hossein Kazempour Ardebilli, who was speaking to his oil ministry’s Shana news agency after talks collapsed, said, “We support cooperation between OPEC and non-OPEC member countries and efforts to bring stability to the oil market, and we urge all producers to continue their negotiations.”
He however, reiterated that his country had made it clear that it wanted to regain its share of the oil market lost occasioned by economic sanctions and claimed that “its position is supported by most OPEC and non-OPEC members around the world”.
Ardebilli insisted that if Iran participated in the proposed output freeze, it would in effect be maintaining sanctions on itself.
However, while fallout from the Doha meeting could weigh on a nascent recovery in oil prices, the market may not tumble as much as it did earlier this year, when Brent hit 12-year lows of around $27 in late January, some analysts said.
“Gradually declining non-OPEC production as well as planned maintenance in the face of resilient oil demand in first quarter (Q1) have recently pointed to improving oil fundamentals,” analysts at Goldman Sachs said.
Also reacting, analyst at Chicago oil consultancy, Ritterbusch & Associates, Jim Ritterbusch, told Reuters that while a few forecasters may be expecting to see a $20 US crude as a result of the Doha outcome, they expect that the US crude would trade at a $35 mark.
…As prices tumble, Iran insist it won’t sign deal
The Minister of State for Petroleum Resources and Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Dr. Ibe Kachikwu, has assured that despite the stalemate on crude oil production freeze, the Organisation of the Petroleum Exporting Countries (OPEC), will continue to work to achieve consensus for output freeze among oil producers.
Addressing newsmen after the failed meeting of OPEC and non-OPEC oil producers meeting in Doha, Qatar, Kachikwu stressed that OPEC must work at achieving a workable consensus on the issue by bringing everybody on the negotiating table.
“We are just going to work at it. It is a supply and demand issue and we need to consult and bring everybody into the circle and thank God that a committee is now in place to try and work towards getting everybody on board,’’ he said.
He explained that once every member country of OPEC is brought on board, it would become easier to convince other major oil producers to sign-up to the freeze policy which is designed to remedy lingering decline in the price of crude oil in the international market.
The much hyped meeting had in attendance 18 countries which include Qatar, Kuwait, Oman, Saudi Arabia, Nigeria, Russia, Mexico, Ecuador, Trinidad and Tobago, Iraq, Mexico, Azerbaijan, Kazakhstan, Angola, Bahrain, Indonesia, Venezuela and United Arab Emirates, but talks failed after Iran insisted it won’t agree to production freeze.
It is expected that the consensus issue been canvassed by Kachikwu will be pursued vigorously in the next OPEC Ministerial Meeting slated for June, 2016 in Vienna, Austria.
Meanwhile, as oil prices tumbled yesterday after failure to reach a freeze deal, Iran has insisted it won’t sign deal, leaving industry watchers to opine that the credibility of OPEC is at stake.
Brent crude tumbled as much as 7 per cent earlier yesterday, but later steadied after a Kuwaiti workers’ strike slashed the country’s oil output by more than half.
According to Reuters report, the strike cut more than 60 per cent of Kuwait’s crude output, lending support to price benchmarks such as Brent and Dubai. Supply of refined oil product from the country also tightened due to scaled-back refinery runs and lower fuel exports.
“The material loss in production from the Kuwait strike has helped the oil market forget about the farce from Doha,” Director of Commodity Research at the New York-headquartered Clipperdata, Matt Smith, told Reuters.
Brent which had earlier fallen by $3 later gained by 20 cents, trading at $43.30 a barrel, while U.S. crude benchmark was off 31 cents, at $40.05 a barrel, after sliding to $37.61 at the day’s low.
This notwithstanding, Iran has urged other oil producers to continue talks on an output freeze to prop up crude prices, but insisted it was justified in not freezing its own output.
Iranian OPEC Governor, Hossein Kazempour Ardebilli, who was speaking to his oil ministry’s Shana news agency after talks collapsed, said, “We support cooperation between OPEC and non-OPEC member countries and efforts to bring stability to the oil market, and we urge all producers to continue their negotiations.”
He however, reiterated that his country had made it clear that it wanted to regain its share of the oil market lost occasioned by economic sanctions and claimed that “its position is supported by most OPEC and non-OPEC members around the world”.
Ardebilli insisted that if Iran participated in the proposed output freeze, it would in effect be maintaining sanctions on itself.
However, while fallout from the Doha meeting could weigh on a nascent recovery in oil prices, the market may not tumble as much as it did earlier this year, when Brent hit 12-year lows of around $27 in late January, some analysts said.
“Gradually declining non-OPEC production as well as planned maintenance in the face of resilient oil demand in first quarter (Q1) have recently pointed to improving oil fundamentals,” analysts at Goldman Sachs said.
Also reacting, analyst at Chicago oil consultancy, Ritterbusch & Associates, Jim Ritterbusch, told Reuters that while a few forecasters may be expecting to see a $20 US crude as a result of the Doha outcome, they expect that the US crude would trade at a $35 mark.
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