Oil rout set for renewal as output talks fail
A deal to freeze oil output by OPEC and non-OPEC producers fell apart last night after Saudi Arabia demanded that Iran join in despite calls on Riyadh to save the agreement and help prop up crude prices.
The development will revive oil industry fears that major producers are embarking again on a battle for market share, especially after Riyadh threatened to raise output steeply if no freeze deal were reached.
Some 18 countries, including non-OPEC Russia, gathered in the Qatari capital of Doha for what was expected to be the rubber-stamping of a deal - in the making since February - to stabilise output at January levels until October 2016.
But Saudi Arabia told participants it wanted all OPEC members to take part in the freeze, including Iran, which was absent from talks.
Tehran had refused to stabilise production, seeking to regain market share after the lifting of Western sanctions against it in January.
After five hours of fierce debate about the wording of a communique - including between Saudi Arabia and Russia - delegates and ministers announced no deal had been reached.
"We need more time to reach an agreement among all OPEC members and main producers to freeze production, which can be by June," one OPEC source said.
The failure to reach a global deal could halt a recent recovery in oil prices.
"With no deal today, markets' confidence in OPEC's ability to achieve any sensible supply balancing act is likely to diminish and this is surely bearish for the oil markets where prices had rallied partly on expectations of a deal," said Natixis oil analyst Abhishek Deshpande.