MOSCOW (Sputnik), Alexander Mosesov – This agreement, reached in Qatar’s capital of Doha, implies that the four countries agree to keep their average monthly oil output throughout 2016 at January levels if other major oil producers followed suit.
Among the governments of oil producing countries, the agreement was positively met by Iran, United Arab Emirates and Canada.
On Wednesday, Canada's Ministry of Natural Resources spokeswoman Cathy Khoury told Sputnik that the recent deal can be helpful for Canadian producers if it supports higher prices.
Iranian Oil Minister Bijan Zanganeh also welcomed the agreement but said that Tehran is not committed to it. At the same, a source close to Iran talks with Venezuela, Iraq and Qatar in Tehran told Sputnik that Iran agreed to freeze oil production.
"The market will show in the coming days whether it beliefs that this is the start of a process, as [Ali] Naimi [Saudi Arabian Minister of Petroleum and Mineral Resources] suggested, or whether the fundamentals are still not such that more balance between supply and demand should be expected any time soon," Tim Boersma, the Acting Director of the Brookings Institution's Energy Security and Climate Initiative, told Sputnik.
Boersma added that January output levels were "of course fairly substantial, to put it mildly."
The expert also expressed doubt that the agreement would be joined by other major oil producers.
"Whether others will follow time will tell, but one major producer, which was not as relevant in the last price slump as today, namely the United States, will surely not join. Therefore, I continue to have doubts whether this exercise will be fruitful," Brookings Institution's Energy Security and Climate Initiative acting director said.
Answering a question whether the agreement would augment oil prices, Steve Hanke, Professor of Applied Economics at the Johns Hopkins University, expressed a similar view, saying that the prices would not grow substantially "because the output freeze levels remain high."
On the perspectives of the agreement, Hanke was even more pessimistic. "Why would others want to copy a half-baked agreement?" he wondered.
Oil prices rallied on Wednesday and Thursday following the Doha deal, with the Brent crude benchmark reaching its highest level since early January by Thursday noon. Prices somewhat slumped late afternoon after news of growing commercial crude inventories in the United States.
Brent crude prices plunged from $115 per barrel to $48.5 per barrel between June 2014 and January 2015, causing significant financial problems for many oil-exporting countries.
