Oil output freeze deal stumbles amid Iran-Saudi tensions

A worker looks at a pump jack at the Rosneft company owned Samotlor oil field outside the West Siberian city of Nizhnevartovsk, Russia, January 26, 2016. REUTERS/Sergei Karpukhin
A worker looks at a pump jack at the Rosneft company owned Samotlor oil field outside the West Siberian city of Nizhnevartovsk, Russia, January 26, 2016. REUTERS/Sergei Karpukhin

Saudi Arabia demanded on Sunday that Iran join a global deal on freezing oil output, jeopardizing an agreement between OPEC and non-OPEC producers that was supposed to help ease a glut and prop up the price of crude.

Some 18 OPEC and non-OPEC countries, including Russia, had been meant to meet on Sunday morning in the Qatari capital of Doha and rubber-stamp a deal – in the making since February – to freeze output at January levels until October 2016.

But the meeting was postponed after OPEC’s de facto leader Saudi Arabia told participants it wanted all OPEC members to take part in the freeze, according to OPEC sources.

Riyadh had earlier insisted on excluding Iran from the talks because Tehran had refused to stabilize production, seeking to regain market share after the lifting of Western sanctions against it in January.

With the deal running into trouble, oil ministers in Doha met with the Qatari emir, Sheikh Tamim bin Hamad al-Thani – who was instrumental in promoting output stability in recent months.

But a new draft seen by Reuters thereafter contained none of the binding points of the previous outline.

It said producers in and outside the Organization of the Petroleum Exporting Countries should agree to freeze oil production at “an agreeable level” as long as all OPEC countries and major exporting nations participated.

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