Mubasher: Oil output freeze agreement signed by Saudi Arabia, Venezuela, Qatar and Russia last month in Doha, will have little impact on global oil supplies; as the countries covered by this agreement will freeze their output at high levels, according to a report released by Asiya Investments, on Tuesday.
Russian Energy Minister announced that more than 15 countries are willing to join the agreement, pointing out that this obligation may freeze 73% of oil supplies in the world.
Oil production freeze can contribute in controlling small part of expected oil production increase, likely to allow Iraq and Iran production, on the grounds that they produce less than their full capacity.
The report pointed out that despite the little impact on actual oil production, this agreement may have benefits to the exporting countries.
Freezing oil production level may be followed by coordination to reduce the production rate, according to the report.
Saudi decision to enhance its production in 2015 led to a drop in oil prices in the second half of last year.
Asiya Investments’ report confirmed that any agreement among major oil producers will have no effect in oversupply in the light of US oil production decline and the high Increase in global supply, especially if Iran does not comply immediately with the freeze.
