Minister of Energy of Saudi Arabia Khalid al-Falih and Iranian Oil Minister Bijan Namdar Zanganeh squashed the hopes OPEC and Non-OPEC producers will agree on production freeze during informal meeting in Algiers.
Riyadh and Tehran are still at serious odds, said sources in OPEC.
“The meeting is advisory in nature. We communicate with each other, listen to the views of the parties, including the secretariat of OPEC and consumers,” – said al-Falih.
“It is still too early to make decisions we will try to reach a consensus in the run-up to the November OPEC summit in Vienna” – Zanganeh said.
Persisting oversupply has cut more than double from the prices peak in 2014, forcing the OPEC and Russia to seek tradeoffs in order to rebalance the market, increase revenue from oil exports and thus to support the budget.
Oil producers insist cutting supplies is essential for prices to go up, although analysts think that this measure will do little to cope balance supply and demand on the market.
A source told Reuters last week that Saudi Arabia is ready to cut production provided that Tehran will join the agreement.
Earlier on Monday, Iran’s oil minister said that the meeting in Algeria is purely advisory in nature, so won’t have significant outcome. Oil prices fell more than 1 percent at the end of trading session on Tuesday.
Iran, whose production has stagnated at 3.6 million barrels per day insisted on an increase to about 4.1-4.2M barrels per day, while oil producers of the Persian Gulf, OPEC wanted Tehran to freeze output at the level not higher than 4M barrels per day, said three sources in OPEC.
“We can’t expect anything until Iran finally doesn’t change its stance and support the freeze”, – said a source in OPEC, familiar with the negotiations.
“Iran considers a fair recovery of production to the pre-sanction level. This has already been discussed, and more than once.” – Novak said. Al-Falih also said he is optimistic about the prospects for the oil market, despite the fact that its balance was delayed.
“The market is moving in the right direction, slower than expected a few months ago, but the main indicators are in order”, – said Al-Falih. “Based on this, we are satisfied with the current state. I believe, we have achieved market balancing, it is just dragging on.”, – he added. According to his data, world oil reserves began to decline.
An informal meeting between OPEC and Russia will be held on the sidelines of the International Energy Forum on Wednesday at 14.00 GMT