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Oil Glut Continues as Iran Still Won’t Play Ball, Saudi Arabia Goes Home

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Oil Pump

Photo: Paul Lowry

So, remember how we talked a while ago about how Iran was refusing to cooperate with the oil production freeze that the rest of OPEC (and especially Iran’s rival Saudi Arabia) have been pushing for ever since Iran’s grand return to the oil market caused the price of oil to plummet?

Well, it seems that Saudi Arabia is, to a certain extent, also refusing to cooperate. This isn’t for any particular production-related goal or because they don’t want a production freeze, though. They just are still ticked that Iran won’t join in on the agreement.

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In a meeting between representatives of 18 oil-producing nations (including non-OPEC nation Russia) in Doha, Qatar back on April 17th, Saudi Arabia (which is the de facto leading nation of OPEC) told the assembly that it wanted all OPEC members in on the freeze—aka, Iran. So, instead of signing a deal, the delegates argued for about 5 hours over the wording of a communiqué before announcing that no deal had been reached.

This has raised tensions two-fold.

On the one hand, this was something of an annoyance to the other oil producing nations, who had been under the impression that the April 17th meeting was going to be where they actually signed a completed deal. The Russian oil minister in particular called the Saudi Arabian demand that Iran be there before any freeze was agreed to “unreasonable,” and expressed disappointment that he had come to Doha expecting to finish a deal but instead ended up debating it.

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On the other hand, the rising tensions between Iran and Saudi Arabia have many worried that the major oil producers may once more be battling for market share, especially as Saudi Arabia has threatened to raise its own production if no deal was reached.

So bottom line, if Iran won’t play ball with the other OPEC nations, then Saudi Arabia won’t, either.

News Source: Reuters