Oil prices have been rising and falling due to the supply glut in the global market. OPEC and non-OPEC members are currently stuck between the fact that the meeting might occur and it might not. Francis Perrin the chairman of Strategy and Energy Policy and the Editor of Arab Oil & Gas spoke with Agence Ecofin on what is likely to be the result of the deal and the future of oil prices.

Ecofin Agency : Oil prices fell on Thursday after attaining a three-month highs this week. Analysts have said that a meeting between oil producers to agree on freezing production is unlikely to take place in Russia on March 20, as Iran up until now has not said if it will participate in the deal. Do you think this meeting will occur?

Francis Perrin : It is very likely that there will be around mid-March a new meeting between Saudi Arabia, Russia, Venezuela and Qatar. These four countries, of which three OPEC members and one non-OPEC state (Russia), have announced this meeting and they well know that prices would fall if it was not effectively held. They will of course avoid this risky scenario.

EA: The chief of staff to President Hassan Rouhani on Thursday said that Iran must recover its share of the global oil market before it can be a part of any agreement among oil producing countries to control supply.

FP: Iran is a very special case as Iraq several years ago. It would be logical for this country to be exempted for some time of OPEC's constraints. But there is here a big if: would Saudi Arabia and other Gulf countries accept to reduce their output and let Iran to increase its own production? The oil logic is not necessarily the same as the political logic in such a tense situation in the Middle East. If several important OPEC and non-OPEC countries can agree on some significant measures (and a production freeze is not enough but it could be a first step) and implement them it would be positive in terms of market development even if Iran is not part of them.

EA: Russian Energy Minister Alexander Novak has said that he will be visiting Tehran on March 14 for more talks on the production freeze with his counterpart. What levers do you think he wants to use in convincing Iran?

FP: It will be very difficult to convince Iran not to increase its oil production and exports. It is probably impossible. Between 2012 and 2015 Iran's crude oil production fell by about 1 million barrels per day and the country now wants to increase it by 1 million b/d in the short-term. Over the same period some other countries, including Russia, rose their production. Iranian high officials have repeatedly said that it is up to other producers, especially those which took advantage of Iran's difficulties, to reduce their production. We must stress however that the goal of a 1 million b/d increase in 2016 is too optimistic. For commercial and financial reasons the effective rise in Iranian crude exports will be slower than hoped in Tehran. There will be some moderation even if it is not the consequence of a deliberate political decision by Iran.

EA: Analysts have said that there is a possibility of Iran being exempted from output freezes just like Iraq in the past, when the country was a subject of international sanctions. Do you think it would be given a special term?

FP: Iran has clearly refused to freeze or to reduce its production. The Iranian Oil Minister, Bijan Namdar Zanganeh, said that some countries produce more than 10 million barrels per day of oil (Russia and Saudi Arabia) and that they want Iran to freeze its production. For Bijan Namdar Zanganeh, it is a "joke". He added that Iran would be very happy to freeze its production at 10 million b/d (Iran's crude oil production was almost 2.9 million b/d in 2015). The country wants to increase its production by 1 million b/d in 2016 and its oil exports by the same volume. As the production of some countries was on the rise over the recent period Iran's production fell by about 1 million b/d since the beginning of this decade due to Western sanctions, especially the embargo imposed by the European Union in 2012. Tehran stresses that countries which increased their production at its expense over the recent period must do what is necessary to push oil prices up.

This position is very logical but it is not sure that Saudi Arabia would accept to reduce its production as Iran would increase its output. It is thus likely that several states will freeze their production and we know it will not be enough because there is an oversupply of about 2 million b/d of oil on the market.

EA: If the meeting eventually takes place, what will be the outcome of the meeting as countries like Saudi Arabia welcomed the deal to freeze production at January levels but does not plan to cut production to bolster oil prices?

FP: Saudi Arabia, Russia, Venezuela and Qatar will confirm their willingness to freeze their production and will point out that several other countries, whether members of OPEC or not, are ready to follow the same path. President Vladimir Putin has just said that the Russian oil industry will support the freeze. These countries will also try to "talk the market". Words can be important, at least for a short while. They will try through their communication to maintain the recent gain of oil prices. Better than nothing but not enough.

EA: What will be the impact of the crisis between Iran and Saudi Arabia on the current deal to freeze output?

FP: It will not prevent a freeze, which will not apply to Iran. But it is a serious obstacle to reach an agreement which would provide for a reduction of production, either within OPEC or between OPEC and some non-OPEC countries.

EA: Looking at the African countries that will attend, talk of Nigeria, Angola, Algeria and Libya, do you think they will have a common goal and if not what impact do you think that will have on Africa as it is the most affected by the decline?

FP: These four countries are the four African members of OPEC but they will probably not be present at this meeting. That being said they will support a production freeze or more. Let us remind that Algeria and Nigeria are asking for an OPEC production reduction and not only for a freeze. Libya is a special case because its oil production is already very low due to its internal political and security situation and it is not sure that this country would accept a reduction.

If the oil prices were to fall further the impact would be very severe for African oil producers and exporters, especially for the OPEC member states. They are developing countries and their dependence on oil revenues is very high. Moreover they are not in a position to increase their production in order to try to offset the fall in prices.

EA: Considering all these what will be the future of oil prices?

FP: 2016 will very likely be a difficult year for oil producers and exporters because world oil production will not be reduced. We will see an increase of world oil demand (+1.2 million b/d according to the International Energy Agency) and a fall in non-OPEC supply (-600,000 b/d) but Iran will put more oil on the market even if it will be less than the 1 million b/d announced in Tehran. 2017 could be better for exporters but it will probably not be the result of decisions taken by producers. It will be the impact of very low oil prices on world oil demand and supply.

EA: After the 2011 revolt that saw the end of Gaddafi, Libya has been facing series of attacks and recently the chairman of Libya’s NOC, Mustafa Sanalla said that there might be more attacks on Libya's oil facilities, except a United Nations-backed unity government is sanctioned. What impact do you think the attacks will have on oil prices?

FP: Normally the situation in Libya should push oil prices up but it is obviously not the case. Traders are focused on the excess oil supply, huge oil stocks in OECD countries, the return of Iran on the world market, uncertainties about world economic growth and about China, disagreements within OPEC or between OPEC and non-OPEC countries and not on geopolitics. What happens in Libya, in Syria, in Iraq and in Yemen does not weigh on the oil market, at least so far. If there was no oil oversupply it would be very different.

EA: If finally a UN backed unity government is sanctioned, do you think it will add to the glut in the global market?

FP: Libya needs desperately a political agreement which would be effectively implemented throughout the country. But the internal situation of this country is so complex that we must be very cautious. You have two governments, dozens of militias, the Islamic State and interference from several countries. I am not sure that Libya's oil production will increase significantly in the near future due to these political constraints. It is now about 400,000 b/d only, as against 1.5-1.6 million b/d at the beginning of 2011.

If Libya was able to increase significantly its oil production and exports this year it would add to the problems of producers but it is not the most likely option, unfortunately for the Libyan population.