NewSaudis said to meet with Iran for oil talks before the OPEC meeting in Algeria

OPEC members Saudi Arabia and Iran, whose rivalry derailed an oil supply accord earlier this year, met in Vienna a week before the organisation holds talks in Algeria.

The two oil producers, along with fellow OPEC member Qatar, met at the headquarters of the Organization of Petroleum Exporting Countries in Vienna, according to three people familiar with the matter. They were making preparations for informal discussions between energy ministers from OPEC and Russia in Algiers next week, the people said.

The face-to-face talks between Saudi Arabia and Iran, OPEC’s two leading members and fierce regional rivals, show diplomatic efforts to secure a meaningful deal in Algiers are still under way despite market scepticism. Prices have retreated this month amid concern there will be no serious commitment to constrain supply and all but two of 23 analysts surveyed by Bloomberg this week predict there will be no agreement next week.

“We may be starting see a change of attitude in Riyadh,” said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. “A positive result to the talks in Algiers is looking more likely.”

OPEC’s last attempt to reach a deal, which also involved Russia, the largest non-OPEC producer, fell apart in Doha in mid-April when Saudi Arabia insisted at the last minute that Iran also had to freeze production. Iran had refused because it was just starting to revive exports following the end of international sanctions.

The discussions on Wednesday in Vienna marked the latest step in a flurry of shuttle diplomacy that has seen OPEC officials meet from Paris to Moscow and the Middle East.