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Iran, S Arabia likely to agree on oil freeze deal

Iran’s ex-governor at OPEC said certain signs indicate the likelihood of a consensus between Iran and Saudi Arabia over an oil freeze deal.

Iran, S Arabia likely to agree on oil freeze deal
(Wednesday, September 28, 2016) 10:03

Iran's previous governor at OPEC, Seyyed Mohammad Ali Khatibi, said Iran, Saudi Arabia and even Russia are all ready to implement an oil freeze deal saying “a few weeks ago, Russian President Vladimir Putin and Saudi Prince Mohammad bin Salman discussed oil at their meeting on the sidelines of G20 summit in Hangzhou, talks which indicate that Saudi Arabia and Russia, as two of world’s giant oil producers, are prepared to cap their production.”

Khatibi underlined that Iran has always been an advocate of stability in the oil market asserting “similar comments made by presidents and oil ministers of other OPEC states reveal that a consensus exists over the need for a freeze deal.”

The official, however, underlined that the OPEC summit in Algeria merely pursues consultation purposes; nevertheless, the consultative meeting is likely to change into an extraordinary one in case the members reach an agreement on their oil output.”

“Even Iraq seems to be in favor of freezing crude production,” emphasized the economic expert commenting “although certain Iraqi oil firms might air grievances about a freeze deal, even foreign companies would back a rise in prices given the currently low figures.”

He evaluated the overall atmosphere among OPEC member countries in Algiers as positive stressing “despite the general consensus, a number of differences might exist in details and mechanisms for implementing the freeze project.”

In case of reaching a primary agreement, several expert meeting are expected to be held ahead of the 170th Ordinary OPEC Meeting in Vienna, Austria in order to reach a more comprehensive agreement among OPEC members over implementation of a possible freeze deal.

In response to a question about the possibility of reaching an oil deal between Iran and Saudi Arabia given the turbulent political ties between them, Khatibi said “even during the eight years of Iran-Iraq Imposed War, the two sides would take mutual decisions in OPEC since economic interests outweigh political and regional ones.

Iran’s ex-governor at OPEC said 60-dollar-per-barrel oil seems to be a reasonable range OPEC crude producers reiterating “majority of members are in favor of $60 as the proper figure since a rise in prices could definitely revile oil revenues in OPEC countries in the medium term.

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