The Intelligence Review | volume 1 | issue 1

Russia, Qatar and Venezuela were all willing to participate in a freeze; objections came from
Iran and Saudi Arabia. Iran had Western nuclear sanctions, many of which targeted its oil
sector, lifted in January. On September 1, 2015 Minister Zanganeh said that Iran was
outputting 2.8 million barrels of oil a day and had the intention of reaching 4.2 million in
output by the end of 2016 (Defterios 2015). Since the sanctions have been lifted, Iran’s oil
output has increased to around 3.4 million barrels a day (Lawler 2016). Iran said that they
should be “left alone,” and would not consider joining freeze talks until their oil output
reached four million barrels a day (Nasseri 2016). This unwillingness to work with Saudi Arabia
led to increased tension between Iran and Saudi Arabia, which ultimately loomed over the
freeze talks.
On April 17, 2016, 18 countries met in Doha, Qatar with the purported intent of freezing oil
output at January levels until October of 2016 (Anon. 2016b). However, the meeting was to
no avail, as no freeze deal was struck. The cause of this failure can be directly attributed to the
dysfunctional relationship between Iran and Saudi Arabia. Leading up to the meeting, both
the Saudis and the Iranians attempted strategic maneuvers in order to deceive or force the
other into acting uniformly with their wishes. Initially, Saudi Arabia simply asked that Iran sit
in on the freeze talks. Iran agreed to that, but still held firm that they would not participate in
the discussion. Saudi Arabia then went on to say that they would not participate in the freeze
unless Iran did as well. At the beginning of April, Saudi Arabia proceeded to block Iranian oil
tankers from entering Saudi ports, as well as block them from accessing a number of Saudiowned
storage units in Egypt (Anon. 2016a). This attempt at slowing Iranian output failed,
and thus the Saudis agreed to participate in the freeze deal with or without Iran’s consent.
Iran’s lack of eagerness to participate incited Saudi Arabia to ask OPEC that Iran’s invitation
be revoked a week before the meeting, which Iran reacted to apathetically (Anon 2016b), as
they were only attending to appease Saudi Arabia and the international community.
However, on April 16, one day before the meeting in Doha, the Saudi Deputy Crown Prince,
Mohammed bin Salman, said that the Kingdom could increase its output from 10.5 million to
11.5 barrels a day on a day’s notice, and that it could increase daily output to 12.5 million
barrels within six months (Holodny 2016). That was a direct threat of the use of oil as power
in terms of Saudi foreign policy, primarily directed toward Iran. The numerous deliberate
attacks and bluffs executed by Saudi Arabia with the aim to force Iran into the freeze deal
ultimately failed, as Iran decided not to sit in on the talks on the morning of the meeting in
Qatar. Saudi Arabia said they walked into the meeting with the intention of reaching a deal,
but decided that the deal needed to be scrapped and that they would not participate in the
current deal.
Conclusion
Although the deal fell through, the discussion and looming possibility of a freeze has caused
the oil price to rise, as consumers scramble to store cheap oil in bulk. The oil price has risen
recently due to Canada and Africa suffering disruptions in production and pipelines in May.
This caused a decrease in world oil output close to 3.4 million barrels (Puko 2016). Any cut in
oil production from major outputting countries may have an effect on the global price of oil.
It can be stated with high confidence that foreign officials who represent oil exporting
countries have hidden agendas, and that what they say cannot always be assumed to be true.
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