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Oil producers meet in Qatar to discuss cap, Iran absent Oil meeting in Qatar ends without freeze as Iran absent
(about 7 hours later)
DOHA, Qatar — Oil-producing countries met Sunday in Qatar to discuss a possible freeze of production to counter low global prices, but Iran’s decision to stay home could dilute the impact of any agreement. DOHA, Qatar — Oil-rich nations at a Qatar summit failed to reach an agreement Sunday on a production freeze, saying officials needed “more time” to make the decision as Iran stayed home and vowed to keep pumping.
The attendees, including Saudi Oil Minister Ali al-Naimi, silently swept past gathered journalists at a luxury hotel in Doha ahead of the meeting. Also on hand was Russia, another of the world’s top oil producers. The U.S., now a major producer because of shale oil, did not attend. The hourslong meeting in Doha, the Qatari capital, resembled a failed OPEC meeting in December that saw crude oil prices tumble on the cartel’s indecision. The fact that producers couldn’t agree to even freezing production at near-record January figures likely means oil prices will drop again as markets open Monday.
At least 15 oil-producing nations representing about 73 percent of world output were expected at the Doha meeting, Qatar’s energy and industry minister, Mohammed bin Saleh al-Sada, has said. Speaking to journalists after the summit, Mohammed bin Saleh al-Sada, Qatar’s energy and industry minister, said the 18 countries gathered for the meeting believed “the fundamentals of the market are generally improving.”
The gathering follows a surprise Doha meeting in February between Qatar, Russia, Saudi Arabia and Venezuela, in which they pledged to cap their crude output at January levels if other producers do the same. However, he largely dodged the questions about whether another special summit will be called before OPEC’s next meeting in June and whether Iran had anything to do with the breakdown of the talks.
They hope the cap will help global oil prices rebound from their dramatic fall since the summer of 2014, when prices were above $100 a barrel, though no one is talking seriously about the more dramatic step of cutting production. “We of course respect their position and ... we still don’t know how the future will unroll but it was a sovereign decision by Iran,” said al-Sada, who is serving as OPEC’s president. “The freeze could be more effective definitely if major producers, be it from OPEC members like Iran and others, as well as non-OPEC members, are included in the freeze.”
Prices dropped briefly to under $30 a barrel, a 12-year low, in January, but have climbed to the mid-$40s this week, boosted in part by market speculation about the Qatar meeting. Western markets were closed Sunday and not immediately affected by the discussions. Sunday’s gathering follows a surprise Doha meeting in February between Qatar, Russia, Saudi Arabia and Venezuela, in which they pledged to cap their crude output at January levels if other producers do the same.
Iran decided to stay home late Saturday after saying the day before it would send an emissary to the meeting. They had hoped the cap would help global oil prices rebound from their dramatic fall since the summer of 2014, when prices were above $100 a barrel.
“We reached the conclusion that the Doha meeting is for those who want to sign the oil freeze plans, and if we wanted to have a representative at the meeting, it was to show our support of this project,” Oil Minister Bijan Namdar Zangeneh said, according to a report by the ministry’s SHANA news agency. Prices dropped briefly to under $30 a barrel, a 12-year low, in January, but have climbed to the mid-$40s this week, boosted in part by market speculation about the Qatar meeting.
“But since Iran is not going to sign this, there is no need for the presence of Iran’s representative at the meeting.” Western markets were closed Sunday and not immediately affected by the discussions, though the failure to reach a freeze likely will come into play Monday. Stock exchanges in Saudi Arabia and Dubai closed in negative territory Sunday, with the Saudi Tadawul down 1.48 percent.
With many international sanctions lifted under its nuclear deal with world powers, Iran began exporting oil into the European market again and is eager to claw back market share. It produces 3.2 million barrels of oil a day now, with hopes of increasing to 4 million by April 2017. On Friday, the Iranian Oil Ministry reiterated it would not join a freeze “before it brings its oil exports to the pre-sanctions levels.” Iran decided to stay home late Saturday after saying the day before it would send an emissary to the meeting. Speaking to Iranian state television, Oil Minister Bijan Namdar Zangeneh said it didn’t make sense to send any representative from the Islamic Republic “as we are not part of the decision to freeze output.”
Sunni-ruled Saudi Arabia has said it won’t back any freeze if Iran, its Shiite rival, doesn’t agree to it, throwing into question whether any deal will be reached. The kingdom seems determined to ride out the low prices that could squeeze Tehran. “We can’t cooperate with them to freeze our own output, and in other words impose sanctions on ourselves,” Zangeneh said.
That dispute underscores the level of discord inside OPEC as it faces arguably its biggest challenge since the oil glut of the 1980s. Even if officials reach a deal, Iran’s production and oil from other sources, like the U.S., could keep prices down. With many international sanctions lifted under its nuclear deal with world powers, Iran began exporting oil into the European market again and is eager to claw back market share. It produces 3.2 million barrels of oil a day now, with hopes of increasing to 4 million by April 2017.
The meeting broke up just before 11 a.m. as attendees planned to meet with Qatar’s emir, Sheikh Tamim bin Hamad Al Thani, said Kabalan Abisaab, Ecuador’s ambassador to Qatar, who was on hand for the meeting. A brief report on the state-run Qatar News Agency confirmed the participants met the emir. Sunni-ruled Saudi Arabia had said it wouldn’t back any freeze if Iran, its Shiite rival, doesn’t agree to it, throwing the deal into question before the meeting. The kingdom seems determined to ride out the low prices that could squeeze Tehran. Saudi Oil Minister Ali al-Naimi declined to speak to journalists during the meeting.
Abisaab said participants would return to the meeting in the afternoon and continue their deliberations. That dispute underscores the level of discord inside OPEC as it faces arguably its biggest challenge since the oil glut of the 1980s. Even had officials reached a deal, Iran’s production and oil from other sources, like the U.S., could keep prices down.
Asked if Iran’s absence had an effect, he responded in Spanish that it “didn’t matter.”
“Believe me, everything is going well,” he said.
But later Sunday, a group of officials suddenly left the talks without explanation. Saudi and Russian officials were not among them.
“Just wait, just wait,” Abdallah Salem el-Badri, the secretary-general of OPEC, told trailing journalists as he left the meeting.
Asked a short time later if there would be a deal, Mohammed bin Hamad al-Rumhy, Oman’s blunt-spoken oil and gas minister, responded: “Absolutely.”
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Associated Press writer Amir Vahdat in Tehran, Iran, contributed to this report.
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Copyright 2016 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.Copyright 2016 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.