A lot was on the line at the Doha oil talks where the world’s top oil producing countries met just Sunday.
The summit was a response to the constant decrease in oil prices as of June 2014. It was set to discuss oil freezing options in an attempt to decrease global oil supply and subsequently lead to higher oil prices. The meeting, nonetheless, has run into some difficulties with rising tensions between Saudi Arabia and Iran, according to BBC News.
Although not formally an OPEC event, most of its members will be represented. Of the notable countries taking part in it are Russia. USA and China, two of the world’s largest oil producers will not be attending. And just one day earlier, Iran made a last minute decision not to attend, shaking everyone’s doubt in a positive outcome.
As Iran emerges from the removal of western sanctions, its government has made it clear that freezing oil production is not an option. Its goal is to regain its oil market share and is pumping up production in an attempt to do so. Saudi Arabia, on the other hand, stated its willingness to freeze production at current levels if Iran is willing to do so.
However, even if a general agreement to freeze production is reached, analysts believe its impact would be marginal. Oil producing countries need to decrease output not just freeze it. As put by London consultancy Capital Economics: "It would not be a game changer."
Oil prices increased from all time lows to around $40 on Friday as traders hoped for positive outcomes from the talks (Cnbc.com). Unfortunately, the countries’ leaders failed to reach an agreement and the fate of the oil crisis is yet to be determined.
Cover credit: AdvisorAnalyst.com