Khobar-Key members of the Organization of Petroleum Exporting Countries intend to meet with other producers in Russia on March 20 to renew talks on an agreement to cap oil output, Nigeria’s Petroleum Minister said.
There will be a “dramatic price movement” when the meeting takes place, Nigerian Minister of State for Petroleum Resources Emmanuel Kachikwu said at a conference in Abuja, Nigeria’s capital, on Thursday.
Kachikwu didn’t specify whether Iran would attend the planned talks. The nation’s return to global oil markets after sanctions were lifted hasn’t lived up to its promises as it faces continued financial and logistical restrictions.
Saudi Arabia, Russia, Qatar and Venezuela agreed on Feb. 16 in Doha that they would freeze production, if other producers followed suit, in an effort to tackle the global oversupply.
Ecuador, Algeria, Nigeria, Oman, Kuwait and the UAE have announced their readiness to freeze production but no formal agreements on this issue have been signed yet.
“Both the Saudis and the Russians, everybody is coming back to the table,” Kachikwu said, adding that producers generally seek a recovery in the crude price to $50 a barrel.
While Russia confirmed its readiness to take part in the talks, the time and date of the meeting is still being discussed, according to a statement on the website of the nation’s Energy Ministry.
At a meeting of President Vladimir Putin with heads of major oil companies on March 1, Russian Minister of Energy, Alexander Novak, said that freezing production will bring together more than 15 countries, OPEC members and countries outside the organization, which account for 73% of oil production in the world.
Even if the meeting results in only more talk rather than an effective cartel agreement to fix oil prices, the Kremlin is clearly hoping that talk alone could possibly edge up oil prices.
Moreover, the countries had agreed to freeze production at the January level, which was one of the highest in history.
Still, analysts have said that freezing production will do little to reduce the surplus, especially as Iran, that intends to increase exports following the end of international sanctions, dismissed the proposal as “ridiculous.”