Four leading world crude oil producers – Saudi Arabia, Russia, Qatar and Venezuela – have indicated their willingness to cut production in a bid to stabilize sliding crude prices.
But, the agreement, which came at the end of a meeting in Doha on Tuesday, had a big caveat – that other producers would also agree to cut their production during the next meeting of the Organisation of Petroleum Exporting Countries (OPEC).
The meeting scheduled for June, 2016 in Vienna, Austria would be the first joint meeting of OPEC and non-OPEC in one and half decades.
Nigeria and other members of the OPEC may soon have a respite as the declaration triggered a jump in crude oil price on Tuesday, with Brent crude blend rising from $31.53 per barrel to about $32.30.
Qatari energy minister, Mohammad bin Saleh al-Sada, said the resolution, if followed through, would help stabilize the global oil market currently experiencing unprecedented price declines as a result of over-supply glut.
Oil prices have dropped by more than 70 per cent to less than $30 per barrel since 2014.
Russia, Saudi Arabia, Qatar and Venezuela are ready to freeze oil production at January’s level if other producers do the same.
Analysts the big challenge would be mobilising other oil producing countries, including Iran, to also agree to cut their production.
Iran, which is making a return to OPEC after a long absence, exported its first crude oil consignment to Europe on Sunday.
Iran, whose production currently stands at 3.1 million barrels per day (bpd), said it had reached an agreement to export oil to France, Russia and Spain.
Iran’s deputy oil minister, Rokneddin Javadi, was quoted as saying the shipment of the first consignment, the first in five years, marked “a new chapter” in the country’s petroleum industry.
Iran said in January that it planned to add to its production, saying the country should not be blamed if prices continue to slide.