Oil meeting on output freeze unlikely without Iran progress: sources

Thu Mar 10, 2016 10:04am EST
 
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By Rania El Gamal and Alex Lawler

DUBAI/LONDON (Reuters) - 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.

But the biggest roadblock to a wider deal, OPEC delegates say, is Iran. Tehran feels it should be exempt from the agreement as it wants to recover market share it lost under Western sanctions. Kuwait said on Tuesday it will commit to the deal - if all major producers including Iran do so.

"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. Brent crude LCOc1 was trading above $40 a barrel on Thursday, up 50 percent from a 12-year low of $27.10 reached in January.

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.

"Our view is not to go there with the possibility of no agreement so as not to affect prices negatively," said another source from a major OPEC member, referring to the proposed March 20 meeting.

OPEC's Gulf members favor meeting in the first half of April, in Doha or another Gulf city, a Gulf delegate said last week.   Continued...

 
The logo of the Organization of the Petroleum Exporting Countries (OPEC) is pictured at its headquarters in Vienna, Austria, August 21, 2015. REUTERS/Heinz-Peter Bader