Kuwait and Iraqi oil ministers managed to sit down at the same table to discuss production even after Iraq’s invasion in 1990. OPEC has overcome more serious conflicts than those facing Saudi Arabia and Iran. Iraq’s oil minister attended the meeting in Tehran but didn’t comment afterward. Iraqi officials have signaled that they are willing to limit their production, if others follow suit.
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The increased output represents the renaissance that has taken place in Iraq’s oil industry since the fall of Saddam Hussein, but also the country’s deep need for money-as it furiously pumps oil to generate revenue to fight its war with Islamic State. The country has contributed to the global glut with record production reaching 4.35 million barrels a day-the second-most in OPEC. Iran says it needs $30 billion in oil-and-gas-field investments to achieve its long-term production goals.Īnother missing piece for OPEC is Iraq. Tehran recently canceled a forum in London to unveil new terms for international oil companies to work in Iran because the contracts haven’t been completed. There are doubts that Iran can ramp up production as quickly as its oil ministry says. “They viewed the reality with a logical view,” he told Shana, the state-run news service of Iran’s oil ministry. Zanganeh told state media that he talked toĪbout the importance of Iran’s return to the export market. But he didn’t make any reference to the Tehran meeting where his country was also represented. Iranian officials have said they are well on their way to increasing output by one million barrels a day this year and won’t consider limits until then.Įarlier Wednesday, Venezuelan president Nicolás Maduro tweeted a statement praising the decision by Saudi Arabia and Russia in Doha to freeze output. Limiting production would clash with Iran’s national priorities now that sanctions over its nuclear program have been lifted. Caracas’s economy is contracting after years of social overspending, Moscow is subject to stringent international sanctions while Tehran is only starting to recover from decades of isolation. Venezuela, Russia and Iran are all facing exceptional challenges. But even if the OPEC producers and Russia decided to limit output to January levels, demand wouldn’t catch up with supply until late this year. Output has fallen in the U.S., with data released Wednesday showing North Dakota’s fell to its lowest levels since August 2014. were part of the reason for the supply glut. Surging output from Saudi Arabia, Iraq, Russia and the U.S. “People believed that Iran would blow up the agreement.”īut Wednesday’s talks offered little hope that the world’s oil-supply surplus would be addressed soon. “Short-term, if OPEC is able to agree on anything, that’s a step in the right direction,” said David Meaney, portfolio manager at BP Capital LP, an investment firm with about $1 billion run by Oklahoma oil-man Zanganeh said the Saudi agreement with Russia and others was a “first step and more steps must follow.” oil prices settled up 5.62% Wednesday at $30.66 a barrel, as expectations that Iran would reject the Saudi plan altogether faded. Production curbs are difficult to monitor, and Saudi Arabia has accused Russia, Iran and others of violating agreements in the past. With prices so low, Saudi Arabia saw the talks with Russia, Iran and others as an exercise in building trust, said another OPEC official from a Persian Gulf Arab country. The attempt to get Russia and OPEC on the same page represented a departure for Saudi Arabia, which had been convinced that limiting output only helped rival producers. “Not very encouraging,” said an OPEC official from a Persian Gulf Arab country. After a two-hour meeting over pastries, the group left without issuing a statement or joining Mr. OPEC’s president, Qatar’s oil minister Mohammed Bin Saleh al-Sada, led a delegation to Tehran on Wednesday to try to persuade Iran’s oil ministry to join in limits. Saudi Arabia and other supporters of production limits didn’t offer official reactions to Iran’s inaction, but some were privately dismayed. The conflicts between OPEC’s two most influential members have made it increasingly difficult to coordinate action within the 13-nation cartel that controls more than a third of the world’s oil.