The conclusion from the Doha debacle on 17 April was that Riyadh has reversed two decades of separation of oil and politics. It blocked a production freeze agreement of 18 countries because its new rulers would rather do that than accept a rebuilding of Iranian output.
One result of the Doha debacle is likely to be a slide towards cold war inside Opec.
Iran’s increase in exports after sanctions was always going to increase its power and influence, much as an intake of spinach boosted Popeye’s strength. And that increase was always going to be reflected in Opec’s machinations, as has been argued here before.
From a market perspective, yesterday’s non-event in Doha does not warrant the label “disaster”, although for headline writers the alliteration is compelling. Bathos is nearer is the mark.
The self-certificated production numbers provided to the Opec secretariat by member countries for publication in the organisation’s Monthly Oil Market Report (MOMR) are viewed with scepticism by the “secondary sources” — including the likes of Argus — that the IEA and, tellingly, the secretariat itself prefer to rely on.
Venezuela’s oil minister Eulogio Del Pino and his Russian counterpart Alexander Novak both say 15 countries have now been lined up to meet later this month for talks about a production freeze. The notion of a verifiable freeze at January output levels was dreamt up in Doha last month by ministers from Venezuela, Russia, Saudi Arabia and Qatar.