Daily Management Review

Is It Possible to Freeze Oil Production Without Iran?


Key oil-developing countries have decided to hold talks on the freeze on April 17 in Doha, Qatar, the sources told Reuters. However, the question of whether Iran will join oil powers still remains open. Until now, Russia, Saudi Arabia and other major industry players failed to persuade Tehran to at least slow down the production growth.

yeowatzup via flickr
yeowatzup via flickr
Russia and the OPEC countries may negotiate to freeze oil production on April 17 at Doha, Qatar, Reuters reported citing its sources. So far, composition of the meeting’s participants has not been figured out yet. Before, the freezing was already supported by Saudi Arabia, Qatar, Venezuela. In late February, these countries signed a joint agreement with Russia to freezing production at January’s level. The agreement is designed to affect world oil prices, which fell below $ 40 per barrel.

The world’s society has been waiting for the meeting for several months. The largest producers of oil should decide on the production’s freeze, yet so far, there is no certainty that the decision can supported by all OPEC countries. One of the key challenges is Iran’s position. After the lifting of sanctions, the country started aggressively seeking to raise its production to before-sanctions levels. As noted in media, Tehran's present position is favorable to reach an agreement.

Now, according to Reuters’ sources, the oil-producing countries agreed to hold a meeting even without the participation of Iran. However, OPEC have different assessments of whether it is possible to stabilize the oil market without Iran. One of the interlocutors of the agency notes that, "if the rest of the production is frozen but Iran does not agree it will not help the market, unless the demand is not very large. Production in January high even without it." According to OPEC’s data, oil production in Iran in February amounted to 3.13 million barrels per day. This is an increase to a record 188 thousand barrels per day.

source: reuters.com