Opec talks deadlock as Saudi refuses to give concessions to Iran
07 December 2018
Members of the oil cartel Oil Producing and Exporting Countries (Opec) failed to arrive at a decision to cut oil output and boost falling prices after two days of negotiations as rivals Saudi Arabia and Iran remained deadlocked over the terms of a deal.
Saudi Arabia refused to give any concessions to sanctions-hit Iran, possibly on pressure by the United States, further complicating any Opec decision.
Saudi Arabia is under intense political pressure over the killing of journalist Jamal Khashoggi at the Saudi consulate in Istanbul in October. US President Donald Trump has backed Saudi Crown Prince Mohammed bin Salman despite calls from many US politicians to impose stiff sanctions on Riyadh.
In fact, US special representative for Iran Brian Hook met Saudi representative in Vienna this week, ahead of the Opec meeting.
Without any consensus among members of the Opec, it looks unlikely that non-Opec oil-producing nations like Russia will fall in line and support moves t boost oil price. It seems political expediency has got the better of economic necessity and the deep divisions in the energy alliance have now been laid bare.
The talks made some progress on a critical front, with Russia agreeing to cut output by 200,000 barrels per day, news agencies reported. But the 15-member Opec have delayed a decision on output cuts until Moscow commits to a specific reduction.
However, a decision evaded Opec as kingpin Saudi Arabia refused to agree to an exemption for Iran.
Iran, Opec’s third-largest producer, however, is in no mood to cut production as its exports have fallen to a bare minimum under threat of sanctions by the US.
The meeting of Opec and non-Opec oil producers comes at a time when the oil market is near its bottom since the 2008 financial crisis.
Brent was trading at $60.85 a barrel, up 1.3 per cent, at around 7:34 a.m. ET (1234 GMT), while West Texas Intermediate (WTI) stood at $51.78, around half a percentage point higher.