Major oil producers from both the Organisation of the Petroleum Exporting Countries (OPEC) and non-OPEC countries attended the meeting in Doha, capital of Qatar, on Sunday. The 12 members of the OPEC oil producing group, headed by Saudi Arabia, and Russia, Oman and Bahrain, all non-OPEC producers. Mexico, reportedly, participated as an ‘observer’, but the US, a major shale oil producer, and Iran, an emerging power of the crude oil in the OPEC, did not attend the meeting. As expected, the participants of that meeting did not succeed in penning a joint strategy to freeze the crude outputs on January levels to shore up the low prices. The crux of the meek press release was that the participants need ‘more time for further consultations among all the producers and consensus for a robust joint strategy’. The stalemate was mainly attributed to dissension of Saudi Arabia and Iran over the strategy for production. Iranian oil minister categorically rejected the freeze-cap proposal, terming it “detrimental” to their interests. Some analysts were of the opinion that that the meeting in Doha could have brought the long overdue stabilisation in the international oil prices through a consensus on the joint production-freeze on the output levels of January. It was widely claimed that a production freeze at those levels would have accelerated the demand, balanced out the present oil glut, and ultimately shifted the oil price trajectory upwards. However, technically, there is a difference between a production-freeze and a production ‘cut’, and even if those countries would have agreed to put a cap, the existing oil glut in the market (1.5 mb/d) is enough to slacken that move, thanks to countries like Russia (11 mb/d), Saudia Arabia (10.4 mb/d), America (nine mb/d). Iraq’s oil production also boosted to 4.55 million barrels a day last month from 4.46 million barrels in February. Libya is another country that has boosted its oil production on a record level, and can produce more if the security and political situation were to stabilise in that country. The most important factor for oil producing countries is a ‘quick revenue generation’ to support their respective budget deficits, and that can only be possible through solid market share by producing more oil. The re-emergence of Iran on the global economic horizon has changed the whole outlook of the global oil market after its successful negotiations with the P5+1 group. That paved the way for Iran to reclaim its share in the global oil market on the pre-sanction levels. Although years of sanctions had done some serious damage to Iran’s existing output capacity, it needs more foreign investment and some time to reclaim its pre-sanction levels. However, Iranian officials believe that due to the technological advancements they can reach those levels in a very short period of time. Iran, nevertheless, has a range to produce copious oil, which can affect the equilibrium of the international oil prices. The IEA stated that Iran’s March output was 400,000 barrels a day, higher than it was at the start of the year, and that Iran has expressed keenness to add a total of a million barrels a day this year. The prospect for higher oil prices is unlikely, especially when the global economy is slowing down; recently, the IMF downgraded the global growth projection for 2016 from 3.4 percent to 3.2 percent. After the lifting of sanctions many European countries have already started investing heavily in the Iranian oil and gas sector. Other big economies like China and India have signed multiple MOUs. Recently, Minister?of State for?Petroleum?and Natural?Gas?Dharmendra Pradhan?said in an interview that India may invest as much as $20 billion in Iran’s energy industry and ports, and boost imports of crude from the Persian Gulf nation. Iran needs $60 billion annually to meet its aspired target to grow at seven percent. Iran, in an ideal scenario, can produce up to four million barrels per day. Many international vessels load Iran’s crude oil from Jask, which is situated on the country’s Makran Coast stretching along the Sea of Oman. In February, Iran made its first oil shipment from Jask to European markets after the lifting of sanctions, loading three international tankers with four million barrels of crude; more are on the way. The geopolitics of the Middle East between Saudi Arabia and Iran is the lynchpin, and the most important factor that certainly has amplitude to influence the trajectory of the present and future global energy prices. A perennial rivalry exists between the two Islamic countries, and a constant competition for political and economic hegemony in the Middle East. Saudi Arabia would want to grab as much share as it would to support its slowing economy. Currently, the country has a deficit of around 15 percent of the GDP, and its credit rating is shrinking. The 30-year-old Prince Mohammad bin Salman is widely considered to be interested in change, as he wants reforms and is keen to modernise the Saudi economy by shifting the Kingdom’s reliance from oil to other major sectors. The current Saudi regime is investing heavily in research, industry, education, health, religious-tourism and human resources. It is the first time in the history of the US that it is now in a position to export oil without being dependent any more on anyone for oil thanks to its shale revolution. Fracking firms have boosted oil output in the US from five million barrels a day in 2008 to over nine million barrels a day now. The technological advancements in this sector have brought some outstanding production outcomes by extracting oil in just a few months as compared to the traditional exploration methods that takes years to produce the results, although many environment activists have raised serious concerns about the negative impact of fracking as it contaminates the nearby groundwater. Many pundits who closely cover the oil and gas sector are of the opinion that the Saudis wanted to drive out the fracking-producers from the industry by flooding the market with oil glut, the allegation which the Saudi foreign minister categorically rejected, and termed it “an artefact of the free market rule of supply and demand.” Saudi Arabia, Russia and other producers have miscalculated the outcome of the US-Iran deal and the shale gas reality. Reportedly, their continuous pumping of the oil at full scale and flooding the world with an oil glut was allegedly to knock out fracking-producers out of the market. But after that aforementioned ‘deal’, the dynamics of the market have changed and shifted the command in the hands of ‘new players’. Therefore, as for now, abundance of oil, the slowing global economy and the perennial rifts between the major oil producers like Saudi Arabia and Iran have dampened the prospects for higher oil prices. The writer is an entrepreneur and analyst and can be reach at faraz999.fc@gmail.com