Tehran will not participate in an output cap agreement to stabilize oil prices, said Iran's oil minister. Analysts warned that OPEC's failure to strike a deal could have a severe impact on oil markets.
Qatar's Energy Minister Mohamed bin Saleh al-Sada on Sunday announced that 18 of the world's top oil producing countries failed to agree on a production freeze following six hours of talks.
"The general conclusion was that we need more time to consult among ourselves in OPEC and non-OPEC producers," al-Sada said, referring to the Organization of the Petroleum Exporting Countries (OPEC).
A deal two months in the making collapsed when Iran refused to cap output along with the 18 other countries in attendance, including non-OPEC member Russia.
The deal aimed to stabilize markets after oil prices hit a 13-year low of some $27 (23.89 euros) in February, down from over $100 in mid-2014.
"We respect their (Iran's) position … certainly a freeze will be more effective if major producers including Iran are included," said al-Sada. "That would help rebalance the market."
Iran's Oil Minister Bijan Zanganeh on Sunday announced that Tehran would not send a delegation to Qatar since it would not participate in a deal to curb output.
"The Doha meeting is for people who want to participate in the production freeze plan … but since Iran isn't expected to sign up to the plan, the presence of an Iranian representative isn't necessary," the minister said in comments carried by Iran's official petroleum energy news agency Shana.
"Iran will in no way give up its historic production quota," Zanganeh added.
An unyielding kingdom
Saudi Arabia, OPEC's de facto leader, said it would not join a production cap agreement unless Iran participated in the freeze.
Riyadh also threatened to boost production if Iran did not join the production cap agreement, which was expected to remain in place until October.
Natixis oil analyst Abhishek Deshpande told Reuters news agency that the markets' confidence in OPEC's ability to stabilize oil prices would "diminish," which could have severe consequences.
"Without a deal, the likelihood of markets balancing is now pushed back to mid-2017. We will see a lot speculators getting out next week," Natixis oil analyst Abhishek Deshpande told Reuters news agency.
(AFP, AP, Reuters)