18:48 GMT +3 hours25 June 2016
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Pump jacks are seen at the Lukoil company owned Imilorskoye oil field, as the sun sets, outside the West Siberian city of Kogalym, Russia, January 25, 2016

Crude Results: Without Iran, Oil Producers' Idea to Freeze Output in Vain

© REUTERS/ Sergei Karpukhin
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Although several major oil-producing countries, including Saudi Arabia, Russia, Venezuela and Qatar, said they would freeze oil production levels to stabilize falling oil prices, Iran’s unwillingness to follow suit would ruin the plan, Mike van Dulken, head of research at the London-based firm Accendo Markets, told Radio Sputnik.

Earlier today, it was reported that Russian Energy Minister Alexander Novak had a meeting with Saudi Petroleum Minister Ali Naimi, Venezuelan Energy Minister Eulogio del Pino and Energy and Industry Minister of Qatar Mohammed bin Saleh Sada to discuss oil production and the situation on the energy market in the Qatari capital Doha.

After the meeting, Novak said that four countries — Russia, Saudi Arabia, Qatar and Venezuela — were ready to freeze oil production at January levels if other oil producers were to join the initiative.

However the plan might fail due to Iran's unwillingness to cut its oil production. Tehran has just recently returned to the international market after years of international sanctions. That's why the country would want to increase its oil production to at least the pre-sanctions level before it would even consider freezing its production.

"The absence of Iran is a major stumbling block," van Dulken told Radio Sputnik.

The energy expert said that even if everyone freezes their production while Iran continues to pump oil into the market, the situation would end up worse than it is now.

Unless there is a truly global coordinated effort to cut back on oil production, there is little chance that the idea of some countries freezing their production would work, van Dulken said.

Global oil prices plunged from $115 to less than $30 per barrel between June 2014 and January 2016, hitting their lowest levels since 2003, mostly because of a prolonged global oversupply and low demand.

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Tags:
freeze, oil production, oil prices, Iran, Russia, Saudi Arabia
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