DOHA: Oil producing countries meeting in Doha on Sunday appeared close to agreeing on an output freeze to prop up crude prices, the first such deal in 15 years, official sources told Reuters.
A draft agreement circulating in Doha and seen by Reuters says countries’ average daily crude oil production in each month would not exceed the level recorded in January this year.
The freeze would last until October 1 this year, and producers would meet again in October in Russia to review their progress in engineering “a progressive recovery of the oil market”, the draft reads.
Final agreement has not been reached on the draft, but several senior sources in national oil ministries said they believed a deal could be achieved.
“I am optimistic,” acting Kuwaiti oil minister Anas Khalid al-Saleh said on Saturday of prospects for a deal.
“?There is only one proposal. Freeze at the January level till October,” another delegate said, declining to be named because of political sensitivities. “There is a proposal to meet in October and to look forward.”
“We have a deal,” a third senior oil source told Reuters.
Over a dozen oil-producing countries inside and outside OPEC have officially confirmed they would attend the meeting in Doha – although major producer Iran has said it would not participate as it could not accept proposals to freeze its production.
During the freeze, producers would continue to consult on the best ways to bolster the oil market, and the deal would be open for other states to join, the draft agreement says.
The draft provides for the creation of a “high level monitoring committee” of two oil ministers from OPEC countries and two from non-OPEC countries; they would be assisted by a working group of experts.
Although a freeze would be a significant step for oil producers, it would have only a limited impact on global supply and the market is unlikely to rebalance before 2017, the International Energy Agency said on Thursday.