In a bid to tackle plummet that has battered nations, markets and companies, world’s largest producers of oil, Saudi Arabia and Russia consented to freeze oil output at near-record levels but producer Iran and Iraq stood out of this agreement.
- This agreement is first of its kind in coordinated cooperation between OPEC (13 member cartel that controls more than a third of the world’s oil) and non-OPEC producers in 15 years as oil producers seek to boost persistently low oil prices which have sunk by about 70%.
- Contrary, Iran and Iraq is planning to increase output by at least 500,000 barrels a day.
Members of the Organization of the Petroleum Exporting Countries which includes Qatar, Kuwait and Venezuela also joined hands with Saudi Arabia and nonmember Russia in the production freeze.
- According to International Energy Agency, even if all oil producers agreed to a global production freeze at January levels, the world would still have about 300 million more barrels a year than needed.
Why Iran has objection?
When Iran was under sanctions, some countries raised their output and they caused the drop in oil prices and now Iran says how its competitors can expect Iran to cooperate.
- It will commit to a production freeze if a deal will reach among other producers.