Four major oil producing countries--Qatar, Saudi Arabia, Russia and Venezuela-- agreed Tuesday to lead an effort to freeze oil output at January levels but held back from announcing a cut in production of the crude.
Oil producer Iran quickly pulled back from a deal saying it would not abandon its share in the oil market, while Iraq agreed to go along with the arrangement if an agreement was reached among OPEC and non-OPEC countries.
The producers will meet with Iran and Iraq on Wednesday and significant objections by Iran to put output on hold is expected to dominate the meeting. Iran has already announced that it has no intention to cut back production in its efforts to regain market share after years of sanctions.
According to one source, "Iran has its own model and the meeting is taking place in Iran. Iran is returning to the market and needs to be given a special chance but it also needs to make some calculations."
$25 Low
Oil producing nations have finally agreed that they have had enough of lower prices and are starting to coordinate to bolster the $25.00 level as a longer term low. This coordinated move is significant in that it is the first move by any of the producers to cut oil production in any measure. Saudi Arabia has said in the past that while it would be willing to cut supply, by doing so it would only be reducing its own market share while no material impact would be felt to the price.