Saudi Arabia and Russia have agreed to freeze production in a meeting in Qatar today.

Saudi and Russia agree on production freeze

DOHA, February 16, 2016 – Saudi Arabia and Russia agreed to freeze production in a meeting in Qatar today.

The agreement would mean keeping production at January levels, which would allow Saudi Arabia to meet current demand, Saudi Oil Minister Ali Al Naimi said. The month saw 10.2 million bopd of output. Qatar and Venezuela have also agreed to the freeze, the latter suffering the most since OPEC decided not to cut production and the oil price fell 70% from its peak in 2014. Russia and Venezuela had recently expressed support for the restriction.

The accord is conditional on other countries’ participation, mainly Iran and Iraq, which have both claimed to want to boost production. “If Iran and Iraq are not a part of the agreement, it’s not worth much – and even then there is still a question of compliance,” said Eugen Weinberg, head of commodities research at Germany’s banking and financial services firm Commerzbank.

Iran has said it plans to raise production and exports by 1 million bopd in 2016 since sanctions were lifted last month. Iraq has massively increased production to fund its government as the country faces internal conflict. It saw production of 4.35 million bopd in January with increases expected.

Qatar has agreed to monitor the agreement, Energy Minister Mohammad bin Saleh Al Sada said at a press briefing.

Venezuelan Oil Minister Eulogio Del Pino plans to meet with officials from Iraq and Iran to discuss the matter in Tehran on Wednesday.

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