The meeting in Doha about the freezing of oil production began with a 6-hour delay


About the beginning of the meeting announced the official Twitter of the Ministry of energy. The negotiations in the Sheraton hotel in the Qatari capital Doha were supposed to start at 9:00 local time and will last 2 hours but eventually started with a 6-hour delay.

The reason for the delay of the meeting, according to Reuters, the steel requirement of Saudi Arabia to revise the draft agreement to freeze production. In the end, according to informed sources Reuters, the new version of the agreement suggests that it will be joined by all the OPEC countries. This means that the agreement actually starts working only if it’s joined by Iran, who has previously ruled out freezing of the production level.

The first version of the draft agreement with which journalists were able to see yesterday, April 16, included freezing production until October 1, at the level of January 2016. The negotiators planned a new meeting in Russia in October 2016. If the agreement about freezing of oil is reached, to monitor its implementation could establish a special oversight Committee, reported informed sources Reuters.

Since the beginning of April, Saudi authorities, in the person of Prince Mohammed bin Salman several times pointed to the fact that Riyadh will freeze production level only if other major producers including Iran will adhere to this step. Iran, who returned this year on the world oil market after the lifting of international sanctions, is not going to hold back production until it reaches desanctions level (4 million barrels per day). According to March statistics, OPEC, daily production of Iran now is 3,29 million barrels.

Analysts believe that, it would not have ended talks in Doha, the impact on the volume of supply they will not have. This view is held, in particular, most of a Bloomberg survey of 40 analysts, the same view was expressed in his April 14 report IEA about perspectives of the oil market. As the IEA explained analyst Neil Atkinson Reuters, the countries participating in the Doha negotiations, with the exception of Saudi Arabia, now is simply unable to significantly increase oil production.

However, the psychological effect on the success or failure of the Doha negotiations can seriously affect oil prices. In particular, analysts at Bank of America Merill Lynch and Saxo Bank believe that in case of failure of negotiations, the quotes of Brent crude oil will fall from current levels of $43 to $30-35 per barrel.