QATAR’S capital is an inauspicious place for dealmaking. The Doha round of world-trade talks meandered on for almost 15 years. An agreement there on February 16th between Saudi Arabia and Russia, two of the world’s biggest oil producers, to freeze production at January levels if others join in, may presage a similarly never-ending saga to shore up oil prices.
That seemed the likely outcome when, on February 17th, Iran’s petroleum minister, Bijan Zanganeh, emerged from a meeting with his Iraqi, Qatari and Venezuelan counterparts in Tehran saying that Iran supported the freeze, but without indicating whether it would take part. Oil prices climbed afterwards, but unless Iran participates fully, a production freeze is likely to be a non-starter. After years of sanctions it, more than anyone, has an incentive to wrest back market share from countries that cap their output (see chart).
Oil-market bulls say that any sort of discussion about a freeze is a positive surprise. It comes despite tensions between Saudi Arabia and Russia over Russian military intervention in Syria. It coincides with production cuts in America’s...Continue reading
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