Doha Agreement, Future of Oil Market, and Tehran's Role in Stabilizing Oil Production Levels

Following the agreement of four oil-rich countries at the Doha meeting regarding the non-increase of crude oil production, the oil ministers of Venezuela and Iraq traveled to Iran on Wednesday, February 17, to discuss Tehran's positions on this matter. According to a Reuters report, the fate of global oil transactions could be shaped by discussions that take place during the meeting between the oil ministers of Venezuela and Iraq with their Iranian counterpart. Eulogio del Pino, the Venezuelan oil minister, announced after the Doha agreement that negotiations regarding production cuts with Iran and Iraq would continue on Wednesday. The oil ministers of Saudi Arabia, Qatar, Russia, and Venezuela agreed in a joint meeting held on Tuesday in Doha, the capital of Qatar, to maintain oil production levels at January (Dey/Bahman) levels, pending the agreement of other major crude oil producers. Meanwhile, Bijan Namdar Zangeneh, Iran's oil minister, reacted to the Doha agreement by stating that this matter warrants discussion and it remains to be seen what their intentions are. He added that in line with this, Iraqi Oil Minister Adel Abdul-Mahdi and Venezuelan Oil Minister Eulogio del Pino are set to come to Tehran for a trilateral meeting. Zangeneh noted that the oil market is currently facing an oversupply and that Iran will not forgo its share. Before sanctions, Iran exported 2.2 million barrels of oil daily, but during the sanctions, this amount fell to about one million barrels. Reports indicate that after the implementation of the JCPOA, this figure has increased to between 1.3 to 1.4 million barrels. Mehdi Varzi, an international oil expert residing in London, explained Zangeneh's comments regarding the current oil market's oversupply and Iran's position on the Doha agreement, stating that two years ago, when OPEC decided to maintain its quota and not reduce production, Saudi Arabia was producing between 8 to 9 million barrels per day, whereas it has now increased its production to 10.5 million barrels. This oil expert believes that Iran should have the right to at least restore its production to pre-sanction levels. Mohammed Saleh Al-Sada, Qatar's oil minister, after the Doha meeting, called for other producers such as Iran and Iraq to immediately halt their production increase plans, stating that this action would mean market stability. Oil prices have decreased by about 70% over the past 18 months, falling below $30 per barrel for the first time in over a decade from around $115 in mid-2014. Venezuela has suffered the most from the decline in crude oil prices, and oil prices below $30 have also affected Russia's budget balance. Saudi Arabia's economy has also been severely impacted by the declining oil prices, experiencing a budget deficit of $98 billion last year. Parviz Mina, an oil expert residing in Paris, believes that the results of the Doha quadrilateral meeting will only prevent further declines in oil prices. Saudi Arabia, which previously sought to pressure Iran and Russia by increasing oil production, has ultimately had to reconsider its production levels to stabilize prices in international markets after facing currency budget shortages and budget deficits, as well as the inability of rising domestic oil product prices to resolve their financial issues.