Meeting on Oil Output Freeze Unlikely Without Iran: Sources

Meeting on Oil Output Freeze Unlikely Without Iran: SourcesMeeting on Oil Output Freeze Unlikely Without Iran: Sources

A meeting between oil producers to discuss a global pact on freezing production is unlikely to take place in Russia on March 20, sources familiar with the matter say, as OPEC member Iran is yet to say whether it would participate in such a deal.

OPEC officials, including Nigeria’s oil minister, have said a meeting would take place in Moscow on that date, potentially as the next step in widening an agreement to freeze output at January levels struck by OPEC members Saudi Arabia, Venezuela and Qatar plus non-member Russia last month, Reuters reported.

But the biggest roadblock to a wider deal, OPEC delegates say, is Iran. Tehran says it should be exempt from the agreement as it wants to recover market share it lost under western sanctions.

“They are not agreeing on the meeting. Why would the ministers meet again now? Iran says they will not do anything,” said an OPEC source from a major producer. “Only if Iran agrees, things will change.”

The pact on freezing output has helped support oil prices, which started a slide in mid-2014 due to oversupply. But some delegates are wary that if many oil producers met too soon before getting the nod from everyone, prices could weaken again if the talks ended in disarray.

Tehran has rejected freezing its output at January levels, put by OPEC secondary sources at 2.93 million barrels per day, and wants to return to much higher pre-sanctions production. “Tehran wanted a freeze ... for them to be based on 4 million barrels a day, their pre-sanctions production figure,” said one source familiar with the discussions. A source familiar with Iranian thinking agreed.

The issue is set to be discussed when Russian Energy Minister Alexander Novak meets Iranian counterpart Bijan Namdar Zanganeh. Novak is visiting Tehran on Monday, RIA news agency reported, citing the Russian Embassy in Iran.