Saudi Arabia is prepared to join an oil output freeze next month without Iran taking part, a senior Opec delegate said, making a deal among big producers more likely.
Some of the world’s largest oil nations will meet in Doha on April 17 to discuss restraining output. It follows a provisional agreement reached in February by Saudi Arabia, Russia, Qatar and Venezuela to keep production at January levels.
“There is agreement from many countries to go along with a freeze — why make it contingent on Iran,” said the delegate.
The comments contrast with those from Gulf officials last month that suggested any deal was conditional on Iran, Saudi Arabia’s Opec rival, taking part alongside other big producer countries.
Iran has sought to increase production and exports after the lifting of sanctions against its oil industry in January. Iranian officials have until now shown no willingness to back any deal that would result in restricting its own output.
Questions have been raised among Gulf delegates about the country’s ability to increase output, suggesting this could be one reason for compliance even without Iran.
“Despite all the bragging, we have yet to see what Iran can do,” said the delegate.
Abdalla El-Badri, Opec’s secretary-general, said on Monday at a news conference in Vienna: “Maybe in the future they will join the group. They [Iran] have some conditions about their production.”
About 15 Opec and non-Opec countries — accounting for two-thirds of global oil output — support an oil freeze, Mohammed Bin Saleh Al-Sada, Qatar’s energy minister, said last week.
Some market analysts have said an oil freeze at January levels would have a limited impact on supply and demand balances because many producer countries were producing near record levels.
Even so, a provisional deal has helped to support prices and reverse negative market sentiment towards oil. Brent crude was at $41.47 on Tuesday, up 53 per cent since hitting a 2016 intraday low of $27.10 a barrel in January.
NEO Monitoring Report