Research Team at Societe Generale, suggests that the key takeaway from the events of last weekend in Doha is not neutral fundamentals or possibly bearish market psychology. Key Quotes “It is the fact that when it comes to Saudi oil policy, we’ve learned that we now need to listen very carefully to Saudi Deputy Crown Prince Mohammed bin Salman (MBS). In contrast to earlier Saudi signals that they were amenable to participating in a freeze that excluded Iran, MBS said on 1 April that Saudi Arabia would not freeze unless all OPEC members including Iran also agreed to a freeze. Following that strong statement, there appeared to be other signals – once again – that a freeze excluding Iraq could still be reached, including a statement from Russia that they had agreed with Saudi Arabia on such a deal. It was these mixed signals that caused us to estimate the probability of a freeze deal (excluding Iran) at 50% -- in other words, a tossup, or too close to call. Then, this past Saturday 16 April, the day before the Sunday Doha meeting, MBS (in a wide ranging interview) essentially repeated his 1 April statement that the Saudis would not freeze unless Iran agreed to a freeze. A draft freeze agreement excluding Iran was circulated in Doha on Saturday evening, and according to reports, Saudi Oil Minister Ali al-Naimi was in favour of the draft. However, on Sunday morning, the day of the meeting, Naimi apparently received instructions from Riyadh to change his position and to take a hard line: no freeze without Iran. Although lengthy talks then took place (without any representative from Iran), in the end, the deal was killed by Saudi Arabia. Details are still emerging, but the bottom line is that the Deputy Crown Prince overruled the Oil Minister. This is a major change for the oil markets, which have looked to Oil Minister Naimi as the key decision maker for Saudi oil policy since 1995. MBS is now calling the shots for oil in Saudi Arabia, not Ali al-Naimi. It is unclear what this means for Saudi Arabia and the oil markets. For Saudi oil policy, what we can say at this point is this: while commercial oil market considerations may continue to dominate decision making, with a Saudi goal of long term revenue maximization, geopolitical considerations may have just become a bit more important in the mix.” For more information, read our latest forex news.