Oil producers including Gulf OPEC members support holding a meeting next month to discuss a deal to freeze output even without Iran, OPEC sources said, as political pressure to prop up prices increases.
On Monday, Russian Energy Minister Alexander Novak said after talks in Tehran that a deal could be signed in April and exclude Iran, which he said has the right to boost output after years of sanctions.
Kuwait, for one, has argued that all major producers need to be part of the output freeze.
While an exemption for Iran is not ideal, it is not a deal breaker, OPEC sources said.
“It’s a setback but it will not necessarily change the positive atmosphere that has already started,” said one OPEC source from a major producer, referring to Iran saying it will not join any freeze accord.
“There are still talks about a possible meeting between main producers,” the source said.
Two other sources familiar with the matter said the meeting was set to take place on April 17 in the Qatari capital Doha.
Brent crude was trading at about $39 a barrel on Wednesday, up from a 12-year low of $27.10 reached in January.
A preliminary deal to freeze output at January levels, agreed last month by Saudi Arabia, Qatar and Venezuela plus non-OPEC member Russia, has helped to support prices.
A second delegate from the Organization of the Petroleum Exporting Countries said not having Iran in the pact was not the perfect outcome but it was not the worst.
“If the others freeze and the Iranians are outside the agreement, it will not help the market unless the demand is very large,” this delegate said. “January output is already at high levels.”
Some OPEC sources said it was hard to backtrack from the freeze deal after Iran said it would not join, so as not to impact the market negatively.
“You can’t ignore all other oil producers. The meeting is likely to go ahead,” a third source said, adding that the April meeting was likely to discuss and finalize the details of the freeze deal. “We will not just meet for the sake of meeting.”
It was not clear which countries besides the original four would attend. Kuwait and the United Arab Emirates have said they would commit to the freeze if other major producers also participated.
The willingness of Iraq, the biggest source of OPEC supply growth in 2015, to join the deal is also important. Baghdad on Monday said the freeze initiative was acceptable, citing the hardship for producers caused by low prices.