Oil markets were supported on Wednesday by efforts to curb excessive supply, with Russia and Saudi Arabia attempting to include Iran in an agreement to freeze production at January levels.
In the London market, oil was traded at a price 92 cents higher than the previous close, at $33.10. Yesterday, it closed trading down $1.21. In the American market, oil was traded today at a price 68 cents higher, at $29.72 per barrel.
After Saudi Arabia, Russia, Venezuela, and Qatar agreed on Tuesday to maintain oil production at January levels, a meeting was scheduled on Wednesday for the energy ministers of Venezuela, Iraq, and Qatar with Iranian Oil Minister Bijan Zanganeh.
Previously, Iran’s representative in the Organization of the Petroleum Exporting Countries (OPEC), Mehdi Asali, stated in an interview with the Shargh newspaper that Iran will continue to increase its oil exports until it reaches levels from before international sanctions. “Asking Iran to freeze its oil production level is not logical,” Asali warned.
Although some analysts warn that freezing production at January levels will not significantly reduce the current surplus in supply this year, others note that the initiative itself represents an important step and signals a change in Saudi Arabia’s stance.
“The agreement does not significantly contribute to establishing market balance, but it is important for the parties to talk. The Saudis are no longer signaling that they are fighting for market share but are willing to discuss an agreement,” emphasizes Ildar Davletshin from Renaissance Capital.
Separately, OPEC announced on its website that the price of a barrel of its reference basket of oil on Tuesday was $29.35, which means it increased by 91 cents compared to the previous trading day.
