The deal between Russia, Saudi Arabia, Venezuela and Qatar on freezing oil production at the January levels if other producers join this initiative currently looks weak, Richard Mallinson, a geopolitical analyst at Energy Aspects, independent research consultancy specialising in global energy markets, told Trend.
"Iran has not directly said it will freeze its own production and because there will be disagreements over what the baseline January production figure is for each country. If the deal unravels because of these issues then the recent increase in prices could quickly reverse,” Mallinson said.
The analyst noted that there is definitely more negotiation needed to hammer out a deal, so it is worth watching closely for any signs that more progress is being made on the details behind the scenes.
Meanwhile Mallinson stressed that the agreement between Russia, Saudi Arabia, Venezuela and Qatar represents a first step in cooperation between OPEC members and also with key non-OPEC producers such as Russia, and oil prices are responding positively.
On Feb. 16, Russia, Saudi Arabia, Venezuela and Qatar agreed to keep oil production at the January levels.
Later, the Venezuelan Oil Minister said that the ministers of Ecuador, Algeria, Nigeria and Oman support the decision on oil output freeze. Kuwait also agrees to join the agreement between Russia and three OPEC countries.
Meanwhile Iran’s OPEC envoy Mehdi Asali said that the country would continue increasing crude output until it reached levels achieved before the imposition of international sanctions. However the negotiations with Iran on the oil production level have not been completed yet.
The price of April futures for Brent oil hit $33.94 per barrel on Feb. 19.
(Trend)
Bakuinfo.Az
