Oil market awaits Iran and Iraq’s decision

Oil prices declined drastically following the joint decision of Saudi Arabia, Russia, Qatar and Venezuela to hold their oil production at January level. This comes in as production is likely to exceed demand considerably, which means crude oil stocks will continue to pile up.  

Price movement will now depend on Iraq and Iran's consent over the Venezuela's proposal. Iraq is likely to support the deal, which will result the rapid production growth of almost 1 million barrels per day since last year to halt. Iran, however, is unlikely to give its consent to the proposal, following the recent lifting of sanctions on the country's oil industry.

"Yesterday's decision is not entirely disappointing in our opinion. Contrary to some projections, the oversupply could be erased more quickly than anticipated, for Saudi Arabia's oil exports will decline in the summer months if the country does not step up its production as usual in order to satisfy its own increased demand" says Commerzbank in a research note