Absentee Iran ensures Qatar oil meet failure
A meeting of oil-rich countries in Qatar that had been expected to boost crude prices by freezing production fell apart as Iran stayed home and vowed to increase its output despite threats by Saudi Arabia. Oil prices, which hit a 12-year low in January by dipping under $30 a barrel, had risen above $40 in recent days, buoyed by the bullish talks surrounding the Doha summit.
But instead of a quick approval of a production freeze, the meeting of 18 oil-producing nations saw hours of debate and resembled the dysfunction of an unsuccessful meeting of the Organization of the Petroleum Exporting Countries in December that sent oil prices tumbling.
The fact that producers couldn't agree to a freeze, let alone a production cut, likely means oil prices will drop again as markets open on Monday. "Prices will trade lower. Maybe sharply lower," said Robert Yawger, director of energy futures at Mizuho Securities USA, noting the failure to reach agreement in Doha. He noted that other factors were negatively impacting prices: US crude oil storage remaining at all -time highs, Iran increasing production, and Libya looming on the horizon to boost output.
Speaking to journalists after the summit, Mohammed bin Saleh al-Sada, Qatar's energy and industry minister, tried to say the lack of a decision showed officials believed "the fundamentals of the market are generally improving."
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.
"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.