OPEC’s general meeting ended in stalemate on Friday, as members of the oil producing cartel failed to agree on production limits for member states. The failure to implement a cap means that OPEC nations are free to go on pumping at will, in a market that is already drastically over supplied.
The non-decision highlights a growing rift within OPEC, between the affluent, low cost producers who are looking to defend their market share, and higher cost producers who are seeing their economies decimated by low oil prices. The failure to secure a deal sent Brent Crude prices tumbling by around a dollar per barrel on Friday.
A key sticking point for the discussions was Iran’s refusal to entertain the idea of a production cap until it has completely emerged from western sanctions.
"We have no decision, no number," Iranian oil minister, Bijan Zangeneh, told reporters.
Abdullah al-Badri, secretary general of OPEC said that the cartel could not agree on any production caps because it could not predict how much oil Iran would add to the market next year. While Iran has huge reserves of crude, questions have arisen over the quality of its current oil and gas infrastructure, raising considerable doubts about how quickly it will be able to ramp up production following the removal of international sanctions.
With no production cap having been agreed upon, many analysts are speculating that oil prices could dip further as the market continues to suffer the consequences of a serious supply glut.