However, the overall trajectory for those prices has reversed since reaching record lows in January. This trend was helped along in March by a smaller scale freeze deal negotiated among Saudi Arabia, Qatar, Venezuela, and Russia. With this deal fresh in the minds of oil-producing countries, there is some hope that a more broad-ranging agreement can be concluded at Doha. This sentiment was expressed, for instance, by Kuwait, whose OPEC governor Nawal al-Fuzaia was quoted as saying on Tuesday that there are “positive indications an agreement will be reached.”
Still, this optimism has been tempered by the ongoing, vocal conflict between intra-OPEC rivals Iran and Saudi Arabia. The former has declared that despite its intention to attend the Doha meeting, it will not participate in any output-limiting arrangement. At the same time, the Saudis have recently insisted that if Iran or any other attendee fails to participate, they will not go ahead with the plan either.
Iran reasserted its position on Wednesday when Reuters reported that Iranian Oil Minister Bijan Zanganeh had once again boasted of his countries projections for the reclamation of market share lost as a result of US-led economic sanctions. The nuclear-related sanctions were lifted in January with the implementation of the Joint Comprehensive Plan of Action negotiated between Iran and six world powers of the Iranian nuclear program.
Since then, the Islamic Republic has reportedly been making every effort to export oil at the highest possible rate, with an eye toward raising the country’s total output from less than one million barrels per day at the height of sanctions to four million barrels per day. Zanganeh’s latest statements declare that this goal will be achieved by next March, the end of the current Iranian calendar year.
The Iranians have been prone to overestimation of the volume and speed of their post-sanctions recovery, but an independent assessment by the International Energy Agency indicated in March that given favorable conditions, the Islamic Republic could raise its current output levels by half a million barrels per day in the coming year.
On the other hand, Saudi Arabia may have something to say about the presence or absence of these favorable conditions, and Iran’s boastful projections may help to solidify the Arab kingdom’s commitment to not participating in an output freeze if Iran does not temper its own ambitions.
To be sure, the Saudis are concerned about the economic consequences of losing market share to their main regional adversary. But they are equally or more concerned about the geopolitical effects of the return of the Iranian oil economy at a time when Iranian-Saudi relations are historically fraught.
In January, Saudi Arabia cut off diplomatic ties with the Islamic Republic following the storming of the Saudi embassy and consulate by Iranian mobs. The incident was spurred by sectarian conflict stemming from the Saudi execution of a dissident Shiite cleric – a conflict that many global security analysts have viewed as closely connected to the civil wars in Yemen and Syria, where the Saudis and Iranians back opposing sides.
Saudi Arabia leads a coalition of Gulf Arab nations that are participating directly in the Yemeni conflict, in the interest of confronting the growth of Iranian power there through the Islamic Republic’s Houthi militant proxies. As the conflict has continued to rage, the Saudis and their allies have repeatedly made public remarks rebuking Iran for its imperial policies in the region and portraying the rising tide of Iranian influence as a major regional threat.
In fact, on Wednesday that Jerusalem Post reported that Khalid bin Ahmed al-Khalifa, the foreign minister of Bahrain, declared that Iran was the major regional threat and the “biggest problem” for the island nation, which is a prominent battleground for Iranian and Saudi influence and a frequent focus of Iranian terrorist activity.
Providing further justification for such statements, Major General Mohammad Ali Jafari, the commander of the Iranian Revolutionary Guard Corps referred to Saudi Arabia, Bahrain, “and their peers” in a meeting to discuss the IRGC’s preparation for war. Breaking Israel News quoted Jafari as saying that these Arab states are “symbols of modern political underdevelopment, and the IRGC … has made preparations for response to their rudeness and stupid behavior, which stems from [their] reliance on the US power.”
The forthcoming meetings may indicate that Saudi efforts to put pressure on Iran have had some effect. But it remains to be seen whether that effect will be visited upon areas of disagreement other than air travel and the haj. If so, it is possible that this new opening between the countries – the first of its kind since January – will demonstrate its impact in the Doha meeting.