Oil production freeze deal in jeopardy as Iran snubs meeting, Saudi Arabia ‘wants amendments’

Iran decided to downgrade its representation in a crucial meeting of oil-producing countries in Qatar on Sunday aimed at freezing production and stabilizing prices. Saudi Arabia threatened not to agree to the deal, unless Iran does.

The meeting of oil producing nations in Doha had a bumpy start – it had been postponed for a few hours, but eventually resumed. Reuters sources said the delay was caused by Saudi Arabia’s request for changes to be made in the agreement.

The deal would see crude production levels frozen at where they were in January, a move which would stabilize oil supply and tackle overproduction, one of the main causes of the drop in oil prices.

It is supposed to include all OPEC participants and some non-members such as Russia and Mexico, who account for 70 percent of global oil production. The deal is meant be in place until at least October 1, when a follow-up meeting will be hosted by Moscow.

The potential deal may be derailed by Iran, which says if it did freeze its output it would not be able to benefit from the lifting of economic sanctions under the nuclear deal with six leading world powers. Tehran’s market share dropped significantly after the US and EU targeted its oil and banking sectors over its alleged nuclear weapons program, and now the conflict is settled Iran wants to have it back.

Iran’s bitter rival and leading crude producer Saudi Arabia said it would not sign the deal unless Iran does.

“If we don’t freeze, then we will sell at any opportunity we get,” according to Prince Mohammed bin Salman, Saudi deputy crown prince and the second most powerful person in the royal family.

Iran still chose to boycott the meeting. Iranian Oil Minister Bijan Namdar Zanganeh announced he would not participate in the meeting at all and was sending the ministry’s public relations director Kazempour Ardebili instead. The minister said Tehran had no intention of signing the deal so his presence was not necessary.

“OPEC and non-OPEC members... should accept the reality of Iran's return to the oil market,” Zanganeh said earlier.

Brent crude was priced at $43.10 a barrel on Friday in London, having rebounded by more than 50 percent from a 12-year low in January.