Over the weekend, talks in Doha between the world’s largest oil producers ended without an agreement to limit production and supplies. Oil ministers from 16 nations came together in an effort to stabilize the global market. The roadblock in the discussions was Saudi Arabia and other Gulf nations refusal to agree on a deal unless all OPEC members joined in agreement. The Saudis have stated that they will not restrain production until there are commitments from the other major producing nations. This statement was aimed directly at Iran, which did not attend the meeting and has ruled out limiting its oil production until the levels return to what they had been before Western sanctions were imposed. It is obvious that the chances for a deal have fallen victim to the geopolitical conflict between Saudi Arabia and Iran.
While the Doha talks have failed to bring about a path towards ending the global oil glut, an oil-worker strike in Kuwait is making headway in that direction. Short term at least. The labor strike has cut Kuwait’s oil output by upwards of 60%. That means 1.7 million fewer barrels of oil will be making it onto the world market, drying up the surplus that has been there since the start of the year. The strike will provide short term relief and might temporarily re-stabilize the oil market However, it is by no means a permanent solution.
More updates and analysis on the oil situation, Iran and Saudi Arabia will come later in the week.