The OPEC cartel left its Wednesday meeting in Vienna unable to come to a consensus on oil production, immediately prompting a spike in prices. OPEC ministers had been expected to increase production by about 1.5 billion barrels per day. Now, the soonest overall output could see an increase is three months from now when the group will likely reconvene.
“It was one of the worst meetings we’ve ever had,” said Saudi Arabian Oil Minister Ali al-Naimi.
Following the breakdown of the session, U.S. crude prices shot up to more than $100 a barrel.
Not surprisingly, some of the reasons talks broke down are political. Saudi Arabia had been pushing the most for the increase, which was seen by some as an attempt to win more favor with Western nations—something that other OPEC nations are not concerned with. Additionally, recent tensions between Saudi Arabia and Iran, which sit on opposite sides of the conflict in Bahrain, also contributed to the impasse.
Iran also led the charge for the OPEC nations that believe no increase in production is necessary. Mohammad Aliabadi, Iran’s acting oil minister, told Reuters that “Iran believes there is no shortage of supply. There is no request that we cannot meet, therefore there was no need to raise output and that was the opinion of many other OPEC members.”
Saudi Arabia is now expected to simply boost output on its own.