Qatar, Saudi, Russia and Venezuela agree to freeze oil output

The Doha meeting came after more than 18 months of declining oil prices, knocking crude below $30 a barrel for the first time in over a decade.

Brent for April settlement advanced as much as $1.33 to $34.72 a barrel on the London-based ICE Futures Europe exchange and was at $34.54 at 10.54am in Hong Kong. Riyadh’s budget has also taken a hit, running an official $98-billion budget deficit in 2015.

“Qatar confirmed (reaching) an agreement with Russian Federation and Saudi Arabia on “freezing oil production at January level”, Al Arabiya said.

We want a stable oil price.”.

Analysts cautioned that it was too soon to expect a sudden breakthrough, even after a year and a half of tumbling oil prices. “If those conditions are not met, Saudi Arabia may still decide to cut when it can influence the market again”.

Jan Stuart, global energy economist at Credit Suisse, said it was too early to say if the meeting will produce results, but pointed out that the presence of al-Naimi made the meeting important.

After trading above $31, the price fell back below $30.

Though absent from the attendee list, Iran would likely show some restraint under any accord, tempering its goal of quickly pumping an additional 1 million barrels per day now that it has been relieved of sanctions.

“Our proposals is that countries that produce oil – Iran, Russia, Venezuela and Iraq – hold more consultations on the situation on the energy market”, Iran’s Supreme Leader Ayatollah Ali Khamenei’s top adviser on global affairs, Ali Akbar Velayati, told a roundtable at the Russian Strategic Research Institute.

OPEC members such as Nigeria and Venezuela have been leading the calls for a coordinated production cut to boost prices, but Saudi Arabia and other low cost producers in the Gulf have thus far refused to play ball.

However, plummeting oil prices have forced producers unwilling to cut production to the negotiating table.

Athough a production freeze could well be a precursor to a full blown production cut, analysts said would do little to help balance the world’s over-supplied markets and instead pointed to Saudi Arabia’s wider impotence in influencing oil prices.

He did not say if Moscow was ready to contribute, while Putin has yet to speak on the subject.