Meeting of oil-rich countries in Qatar that had been expected to boost crude prices by freezing production fell apart Sunday as Iran stayed home and vowed to increase its output despite threats by Saudi Arabia.
Oil prices, which hit a 12-year low in January by dipping under $30 a barrel, had risen above $40 in recent days, buoyed by the bullish talks surrounding the Doha summit.
But instead of a quick approval of a production freeze, the meeting of 18 oil-producing nations saw hours of debate and resembled the dysfunction of an unsuccessful meeting of the Organization of the Petroleum Exporting Countries in December that sent oil prices tumbling.
The fact that producers couldn’t agree to a freeze, let alone a production cut, likely means oil prices will drop again as markets open Monday.
“Prices will trade lower. Maybe sharply lower,” said Robert Yawger, director of energy futures at Mizuho Securities USA, noting the failure to reach agreement in Doha.
The attendees, including Saudi Oil Minister Ali al-Naimi, silently swept past gathered journalists at a luxury hotel in Doha ahead of the meeting. Also on hand was Russia, another of the world’s top oil producers. The U.S., now a major producer because of shale oil, did not attend.
The meeting broke up just before 11 a.m. as attendees planned to meet with Qatar’s emir, Sheikh Tamim bin Hamad Al Thani, said Kabalan Abisaab, Ecuador’s ambassador to Qatar, who was on hand for the meeting. A brief report on the state-run Qatar News Agency confirmed the participants met the emir.
Abisaab said participants would return to the meeting in the afternoon and continue their deliberations.
Despite the strong belief that a agreement would be reached without Irans’s presence, the conference ultimately ended in failure.
The conference’s failure sent crude prices tumbling in early trading on the NYMEX, which fell by more than 6 percent as traders resumed the commodity’s sell-off.