Doha — Top oil producers Saudi Arabia and Russia agreed Tuesday to freeze oil output at January levels but said the deal was contingent on other producers joining in.
The Saudi, Russian, Qatari and Venezuelan oil ministers announced the proposal after a meeting in Doha — their highest-level discussion in months on joint action to tackle a growing oversupply of crude and help prices recover from their lowest levels in more than a decade.
Saudi Minister of Petroleum and Mineral Resources Ali Al-Naimi said freezing production at January levels was an adequate measure and he hoped other producers would adopt the plan.
Venezuela’s Oil Minister Eulogio Del Pino said more talks would take place with Iran and Iraq on Wednesday in Tehran.
“The reason we agreed to a potential freeze of production is simple: It is the beginning of a process which we will assess in the next few months and decide if we need other steps to stabilize and improve the market,” Naimi told reporters.
“We don’t want significant gyrations in prices, we don’t want reduction in supply, we want to meet demand, we want a stable oil price. We have to take a step at a time,” he said.
Qatar’s Energy Minister Muhammad Bin Saleh Al-Sada, who is acting president of OPEC, said this step is meant to stabilize the market.
“We think other producers need to freeze straight away including Iran and Iraq,” he said.
Oil crept higher, with Brent North Sea crude for delivery in April advancing 50 cents to $33.89 per barrel in late morning deals.
US benchmark West Texas Intermediate for March delivery added 35 cents to $29.79 a barrel from Monday’s closing level.
It was the first attempt by OPEC and non-OPEC exporters to control production after almost 19 months of oil price declines.
Oil prices have tumbled about 70 percent since June 2014, hit by oversupply, sluggish demand and worries about the global economic outlook.
The prices came under renewed pressure by the return of Iran to world markets after the lifting of international sanctions linked to its nuclear program.
“We believe, the four of us, that freezing now at that January level is adequate for the market,” Al-Naimi said.
The Qatari minister said that “intensive communications” will start immediately with other OPEC and non-OPEC producers, including Iraq and Iran, to win their approval and support.
The move will benefit both crude exporters and consumers in addition to the world economy, said Sada, who will lead the contacts.
Naimi said there should be a consensus between OPEC and non-OPEC producers.
