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19 March 2024

'Saudi won't lower output even if non-Opec cuts'

Iraqi oil minister sees price stabilising around current levels of about $60 a barrel. (AP)

Published
By Reuters

UPDATE: Saudi Arabian Oil Minister Ali Al Naimi said on Sunday the kingdom would not reduce production to prop up petroleum markets even if non-Opec nations cut output.

"If they want to cut production they are welcome, we are not going to cut, certainly Saudi Arabia is not going to cut," he said.

He added he was "100 percent not pleased" with oil prices. They would improve, he said, but it was unclear when.

Saudi Arabia's oil minister on Sunday defended Opec's decision to keep output steady despite the biggest market slump in years, saying current prices would help global economic growth and petroleum demand, while Arab states would escape major damage.

Al Naimi blamed a price slide to levels half of those six months earlier on speculators and what he called a lack of cooperation by major producers from outside of the Organisation of the Petroleum Exporting Countries (Opec).

His remarks to a conference in Abu Dhabi marked the second time in three days that he has signalled the world's biggest crude exporter would not alter output levels but rather aims to allow the market to stabilise on its own. "I am confident the oil market will improve," he said.

The world is forecast to need less Opec oil globally in 2015 because of rising supply of US shale oil and other competing sources, with no significant increase in world demand growth.

Asked about possible cooperation between members of Opec, which include the world's lowest-cost producers, and non-member countries, Naimi replied: "The best thing for everybody is to let the most efficient producers produce".

He also said that Opec's decision would ultimately help the world economy. "Current prices do not encourage investment in any form of energy, but they stimulate global economic growth, leading ultimately to an increase in global demand and a slowdown in the growth of supplies," he said.

Naimi said the price fall would not have "a noticeable and big" impact on Saudi Arabia or other Arab economies.

Before the Vienna Opec meeting last month, there were hints that Russia could cut output or exports if Opec did the same.

But the message from Moscow after the meeting was that the world's second largest oil exporter after Saudi Arabia would maintain its output. Moscow's ties with Opec were soured by its pledge to cut output in tandem with the group in the early 2000s. Russia failed to follow up, and raised exports instead.

In Abu Dhabi, Naimi suggested Opec could not act effectively to restore balance to the market without joint action with producers outside of the group who he said had shown a lack of cooperation with the group over oil market conditions.  

EARLIER REPORT

One of the biggest reasons for the slide of oil prices is the "irresponsible" supply from producers outside Opec, the United Arab Emirates oil minister said in a speech on Sunday.

Suhail Bin Mohammed Al Mazroui was addressing the opening of a meeting of ministers of the Organisation of Petroleum Exporting Countries (Opec) in Abu Dhabi.

"The world has witnessed a big decline in prices which has and will constitute a big economic burden... One of the big reasons is the irresponsible production of some producers from outside Opec."

Mazroui also said the recent decision of Opec not to cut its production was correct. "It was a correct and strategic decision. We are fully confident of the last decision of Opec."  

No need for Opec emergency meeting now

Iraq's oil minister said on Sunday he saw no need for an emergency meeting of the Organisation of the Petroleum Exporting Countries (Opec), but "we have to wait and see" whether the group made the right decision to keep its output unchanged.

Speaking to reporters on the sidelines of a conference in Abu Dhabi, the minister, Adel Abdel Mahdi, added that he saw prices stabilising at around current levels of about $60 a barrel.