Officials representing 16 oil exporting countries have failed to reach consensus on a plan to freeze their output at January levels at their weekend meeting in Doha. The delegates whose countries are responsible for more than 50% of the world’s crude oil production left the Qatari capital in acrimony with Saudi Arabia casting blame for the impasse on Iran.

Saudi Arabia said it would not freeze its production levels unless all OPEC members did the same, including Iran. Iran, however, has continually stated that it will not participate in such an initiative because it wants to regain market share lost while it was under economic sanctions over its nuclear power program.

Monica Freeman, chief market strategist at Monex BMO Securities said that Saudi Arabia’s insistence on Iran’s participation in the initiative was puzzling.

“The Iranians’ position regarding an output freeze have been widely telegraphed to the world for several weeks. The Saudis knew Iran didn’t want to be party to any plan to restrict production going into the Doha meeting,” she said.

Russia defended Iran suggesting that Saudi Arabia was being ‘unreasonable’ by insisting that all countries participate.

“Iran’s economy was severely damaged by the years of international sanctions. They need to bring in as much revenue as they possibly can to help rebuild their economy. Monex BMO Securities sees little chance of a deal being struck in the near-future and said it expects oil prices to drift back down towards the $35-a-barrel level.


“The Saudis are being intractable and we don’t expect Iran to change its stance any time soon,” said Freeman.

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