Saudi/Iran Spat Means No Freeze Talks at OPEC June Meeting - But None Required Anyway, say Delegates

by Ship & Bunker News Team
Thursday May 5, 2016

Another spat between Saudi Arabia and Iran may have spoiled any chance of talks to revive crude output limits at the Organization of the Petroleum Exporting Countries' (OPEC) June meeting in Vienna, but two OPEC delegates have told Bloomberg that such talks might not be necessary anyway.

The delegates, who spoke on condition of anonymity, represent nations that had supported the idea of resurrected freeze talks just a month ago; they noted that while it looked like the talks might take place in Vienna – with Venezuela even going so far as to request that non-members who participated in the failed Doha meeting be invited – OPEC nations have not responded to the request.

Moreover, they said the talks may be pointless given the changes in the market: a reference to Brent crude advancing since Doha to $48.50 a barrel last week, and to organizations such as the International Energy Agency predicting that global supply and demand will move closer to balance later this year.

The delegates also pointed to continuing discord within the cartel, in the form of members earlier this week being unable to finish their long-term strategy report because of differences over the wording of the document.

Specifically, Riyadh disagreed with Tehran's proposal to include "effective production management" as a challenge for the group.

This follows delays last November due to disagreements over clauses about setting production quotas and curtailing output.

The highly-anticipated Doha meeting came to a crashing halt in April when Saudi Arabia demanded that Iran participate in the freeze - something the Islamic Republic has steadfastly refused to do.