Kuwait strike boosts oil despite failure of Doha talks
Oil prices rebounded on world markets on Tuesday after a plunge caused by the failure of Opec and other producing nations, including Russia, to agree to a deal to freeze output at a meeting on Sunday in Doha.
The main reason for Tuesday’s price recovery appeared to be a continuing strike by oil workers in Kuwait which reduced the nation’s output of about 2.8 million bpd to 1.5 million bpd.
That pay strike, however, will not continue indefinitely, while analysts felt the long-term effects of the failure of the Doha meeting could be felt in crude prices for months to come.
The main reason no deal was done stemmed primarily from Saudi Arabia’s refusal to implement a production freeze unless Iran – an Opec member but not represented in Doha – agreed to go along with it.
For its part, Iran said that, while it wanted others to freeze output, it could not do it until its own crude production had reached pre-sanction levels… something which Iran’s Deputy Oil Minister Rokneddin Javadi said on Tuesday could happen towards the end of June.
