Oil slump: Nigeria, others to meet in April

17 March 2016, Lagos – Oil producers, including the Organisation of Petroleum Exporting Countries, have supported holding talks next month on a deal to freeze output even if Iran declines to participate, OPEC sources have said, as political pressure to prop up prices increases.

Crude oil4

Crude oil barrel

Nigeria had in February backed Saudi Arabia and Russia in freezing oil production, while giving Iran and Iraq a way out to regain some of their lost market shares due to sanctions and war.

The biggest oil producer in Africa supported a production freeze, the Minister of Petroleum Resources, Dr. Ibe Kachikwu, told reporters in Doha on Sunday. Nigeria’s oil production would be 2.2 million barrels a day this month, unchanged from January, he said.

OPEC and non-OPEC producers will meet in Doha on April 17, Qatari Energy Minister, Mohammed bin Saleh Al-Sada, said following a February agreement among Saudi Arabia, Qatar, Venezuela and non-OPEC Russia to stabilise output, according to Reuters.

“To date, around 15 OPEC and non-OPEC producers, accounting for about 73 per cent of global oil output, are supporting this initiative,” Sada said in a statement. Qatar holds the OPEC presidency in 2016 and has been organising the effort.

Oil prices rose on Wednesday, supported by the announcement and on growing signs of a decline in the US crude production. Brent crude was trading near $40 a barrel, up from a 12-year low of $27.10 reached in January.

The reluctance of Iran, which is boosting its oil exports to recover market share after the lifting of Western sanctions in January, to join such an accord has been cited by OPEC sources as a potential roadblock to a wider agreement.

But on Monday, Russian Energy Minister Alexander Novak said after talks in Tehran that a deal could be signed in April and exclude Iran. An exemption for Iran is not a deal breaker, OPEC sources said.

“It’s a setback but it will not necessarily change the positive atmosphere that has already started,” said one OPEC source from a major producer, referring to Iran, saying it would not join any freeze accord.

 

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