Oil production freeze deal: All eyes of Iran as Opec members try for its participation
International attention will fall on Iran today, as Opec members try to secure its participation in what will be the first global oil deal in 15 years, potentially by offering its special terms.
Today’s outcome is crucial because Saudi Arabia and Russia have said that the agreement to freeze production at January levels is contingent on other producers joining in. Qatar, Venezuela and Kuwait have already said they're ready to take part.
But analysts have warned only Iran and Iraq are likely to post big production rises this year, something which will exacerbate the global supply glut and exert more downward pressure on prices.
While Iraq reportedly said it’s ready to freeze oil output at January levels providing a global deal is reached, Iran has been non-committal.
"The basic outline of the agreement that has emerged is still highly contingent on other producers joining in. If the other producers do not agree, then very little will change," Barclays said in a note.
Iran's Opec envoy has dampened optimism over its involvement in a deal today, telling the country's Shargh newspaper that it would continue to increase oil output until it reached its pre-sanctions production level.
Asali also called an Iranian freeze illogical and said the current drop in prices was caused by other producers lifting output while Iran was under sanctions.
Iran was once the second-largest Opec producer and exporter. But the country's oil industry suffered following the imposition of Western sanctions over its alleged nuclear ambitions.