Crude oil prices have slipped to $47 per barrel on low expectations that Russia and Saudi Arabia will actually take significant action to stabilise the oil market.
Brent crude had briefly gone up by 5% on Monday on hopes that the two countries were going to issue a joint statement to implement a production freeze and stabilise the market.
However, Russia and Saudi Arabia resorted to make promises of greater cooperation.
Crude Oil Prices Fall Again amid Low Expectations
Additionally, the Saudi Energy Minister Khalid al-Falih said there was no need for an output freeze at this moment, as crude oil prices were bound to go up with the current improvement of the market, undermining remaining hopes of any joint action.
The question remains how effective any joint action would be considering all the previous failed attempts to concert output cuts and how long this could last.
OPEC Secretary General Mohammed Barkindo at a previous OPEC meeting
Now, all eyes are set on the next informal talks between the Organisation of Petroleum Exporting Countries (OPEC) and non-OPEC producers, to take place in Algeria this month.
OPEC Meeting Outcome Could Be Decisive
The Organisation of Petroleum Exporting Countries (OPEC) and Russia had previously attempted to curb the supply glut earlier this year, but the agreement collapsed in April due to tension between Saudi Arabia and Iran.
Saudi Arabia insisted that all producers should participate in any joint action, which led to the collapse of the talks, since Iran was unwilling to take part.
Iran continues to be determined to raise oil exports after the lifting of Western sanctions earlier this year and is refusing to take part in any output freeze.
However, industry sources have been reported as saying that Iran is still pumping oil at a pre-sanctions rate and could be willing to reach an agreement.
Meanwhile, OPEC Secretary-General Mohammed Barkindo met Iran’s oil minister Bijan Zanganeh in Tehran today, but no details of the discussion have been disclosed so far.