Draft Of Doha "Oil Freeze" Agreement Leaked
By Tyler Durden
With the world’s attention about to focus on Qatar where in just a few hours the Doha OPEC “freeze” meeting is supposed to start (without the presence of Iran which has made it clear it won’t freeze production but “supports the decision for other OPEC and non-OPEC countries to freeze crude oil production” so everyone except Iran), moments ago Tass presented a glimpse of what will be announced.
According to the Russian news agency, a draft agreement of the oil producer countries expected to be signed tomorrow in Doha stipulates that the output will be frozen at the level of January 2016 until October, Azerbaijan’s Energy Minister Natiq Aliyev said in an exclusive interview with TASS on Saturday on the eve of a major off-schedule conference of OPEC and non-OPEC oil producing nations.
“The draft agreement is not large,” Aliyev said. “It is as follows: the states gathering in Doha have reached a conclusion that for normalizing the oil price they agreed to freeze the output at the level of January 2016 until October.”
In other words, the member nations will agree to “freeze” production at output levels that are already record high for the Saudis, Russians and Iraq, even as Iran just boosted its production by some half a million barrels per day.
There is just one problem: there is no actual enforcement mechanism, and since this is OPEC where everyone looks to cheat before everyone else, it means that the ink on the agreement won’t be dry yet, and every country will be pumping like mad to new record-er highs.
According to Tass, the agreement in Doha to freeze oil output will be “gentlemen-like” as the draft stipulates no control mechanisms, Aliyev went on to say.
Aliyev said that “the agreement is gentlemen-like as the countries realize that the maintained norms of output will suit the joint interests. It does not envisage any control mechanisms and each country should observe its implementation.” Which, incidentally, is decidedly false as Saudi Arabia clearly has had its own unique interests ever since the November 2014 OPEC meeting which saw Saudi Arabia break out on its own and in the process effectively end the OPEC production cartel.
“There is no need in a supervisory body,” he said. “No proposals have come since it will have no influence on the countries.”
So… why is OPEC even pretending to freeze production? Oh yes, in hopes the algos will be dumb enough to attempt another forced short squeeze.
“We are ready to sign the agreement in a form that we have seen,” Aliyev said.
Which is another lie, as just last night the Saudi deputy crown price said without Iran, the world’s biggest oil producer will also not sign. Not adhering to the truth did not stop the Azerbaijani, however, who continued:“We believe that all the delegates who arrived in Doha are set to sign it, or why then they came here, otherwise.”
Meanwhile, OPEC has already set its price target as a result of …read more
Source: Draft Of Doha "Oil Freeze" Agreement Leaked
