Iran refused to freeze oil production

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Iranian authorities said they see no logic in limiting oil production, so they do not intend to join such agreements like those made on Tuesday in Doha by representatives of Russia and 3 OPEC countries.

According to officials responsible for Iran’s cooperation with OPEC, many countries were increasing oil production while Tehran was under Western sanctions. Now, after these sanctions were lifted, Iran will increase the production too.

Tehran’s decision makes it impossible to implement the agreement signed in Doha, since it is required for such an agreement that all OPEC countries go for it, including Iran. It is not excluded though, that negotiations will continue.

Some of the other member countries of the oil cartel have already expressed support for the agreement. In particular, Kuwaiti authorities officially expressed their readiness to cut oil production.

According to the country’s Ministry of Oil, Kuwait is ready to freeze oil production in the country at the current level of 3 million barrels per day. However, it will do so only if all members of OPEC join the agreement.

The agreement on the freezing of oil production at January’s level was reached by Russia, Saudi Arabia, Qatar, and Venezuela. Together, these countries extract approximately a quarter of total world reserves.

The goal of the agreement is considered to be rising the steadily falling oil prices. At the same time, the markets reacted sceptically, as the parties need to convince 10 more countries, including Iran.

Source: BBC

 

Image: Ryan Lackey (under CC BY 2.0)