SINGAPORE: A deal among some Opec producers and Russia to freeze output is perhaps “meaningless” as Saudi Arabia is the only country with the ability to increase output, a senior executive from the International Energy Agency said on Wednesday.
Brent crude futures are up more than 50 per cent from a 12-year low near $27 a barrel hit early this year, bouncing back after Russia and Opec’s Saudi Arabia, Venezuela and Qatar struck an agreement last month to keep output at January levels.
Qatar has invited all 13 members of the Organisation of the Petroleum Exporting Countries (Opec) and major non-Opec producers to Doha on April 17 for another round of talks to widen the production freeze deal.
“Amongst the group of countries (participating in the meeting) that we’re aware of, only Saudi Arabia has any ability to increase its production,” said Neil Atkinson, head of the IEA’s oil industry and markets division, at an industry event.
“So a freeze on production is perhaps rather meaningless. It’s more some kind of gesture which perhaps is aimed ... to build confidence that there will be stability in oil prices.”
Libya has joined Iran in snubbing the initiative, and the absence of the two Opec producers — both with ample room to increase output — would limit the impact of any success in broadening the freeze at the April meeting.
Published in Dawn, March 24th, 2016
