Discussion over oil between OPEC and non-OPEC on ice

According to the officials, OPEC’s efforts to bring non-member countries such as Russia on aboard in cutting output have shown some progress. It is expected that Iranian exports will rise soon.
As the oil prices collapsed drastically, Saudi Arabia, a prominent OPEC member, demanded for non-OPEC producers to cooperate with the group.
Alexander Novak, Energy minister of Russia, said, “At first we have been planning to meet in March, but so far no-one has come forward with such an initiative. The situation has calmed down a bit.”
Novak was part of a Russian delegation that held talks with OPEC ministers before OPEC’s November meeting. But no supply cut deal was reached then, OPEC refused to act alone and Brent crude prices fell, reaching a near six-year low close to $45 in January.
From a delegate from Gulf producer it has been informed that OPEC may consider cutting if outside producers were willing to contribute.
The delegate added, “If big non-OPEC producers are willing to cooperate effectively, not only by saying but effectively, to make plans to decrease production, here OPEC may take a decision.”
Algerian Energy Minister Youcef Yousfi, who helped OPEC in 1998-1999 to organize OPEC and non-OPEC production cuts that revived prices from a slump to $10, is now opined in favor of more cooperation amongst exporters.
The issue could rise up the agenda for producers if Iran and world powers reach a deal on Iran’s nuclear work that paves the way for higher Iranian oil supplies, and further weakens prices. On the prospect of a deal, crude prices have been noted to fall this week.
Iran already said that the country want aggressive exports from both OPEC and non-OPEC members. Until 2012, Iran was the second biggest producer of OPEC.
According to a source, “When we lost our market some countries filled the gap, so when Iranian oil comes back to the market it’s time to accommodate it for the benefit of all sides.”
However, analysts doubt whether Russia would want to change its stand on output cuts or not.
“If the nuclear deal happens and Iran increases exports, the market will have to simply accommodate those volumes,” said a long-time OPEC watcher. “I can’t see anyone – be it Saudi Arabia, Iraq or Russia – agreeing to cut their own output.”
Olivier Jakob, oil analyst at Petromatrix, said that boost in Iranian exports would make OPEC to face more challenges ahead, as a 12-member group and doubted Russia would be willing to limit supplies.
“Some have described the OPEC November meeting as the death of OPEC and it is true that the lifting of sanctions on Iran will create a major issue for Saudi Arabia, Kuwait and the UAE,” he said.
“They already have an issue with Iraq increasing production and they will now have to face Iran that will consider itself, like Iraq, not bound by any quota for many years.”
The next meeting of OPEC is scheduled in June, 2015. So far, OPEC has kept its policy more or less unchanged.