Western banks analyze Doha agreement

Representatives of Russia, Qatar, Venezuela and Saudi Arabia have agreed to freeze oil production at the level of January 11 at a meeting in Doha, if other manufacturers join the initiative.

Some foreign banks have commented on how the agreement may affect the oil market.

Goldman Sachs analysts believe that these agreements will not significantly affect the market. "The details of this agreement suggest that such a freeze will have little impact on the oil market as proposed, while there remains high uncertainty that it will even materialize," they noted.

Deutsche Bank also believes that the agreement won't affect the situation in the oil market. "Not only has talk moved from cuts to a freeze, but such a freeze comes from producers who weren't expected to raise production materially in any case (Russia, Venezuela, Saudi Arabia and Qatar)," Reuters cited the bank as saying.

Barclays, in its turn, says that even if the agreement is successful, the upside for oil prices that would result looks limited, and OPEC still faces the dilemma of aiming for either higher prices or market share, but is unable to achieve both," the bank noted, stressing that any positive oil price impact is contingent on other key oil producers.

Commerzbank binds the success of the agreement with whether it will be supported by Iran and Iraq. "Now that sanctions have been lifted, Iran is hardly likely to be willing to leave its oil production at the level of 2.9 million barrels per day, given that Teheran's uppermost priority is to recoup the market share it has lost," RBC cited Bank analysts as saying.