Saudi Gazette report
HOUSTON — Minister of Petroleum and Mineral Resources Ali Al-Naimi said Tuesday he hoped additional producers would join a potential deal to freeze output next month, saying it could help address a global glut.
Addressing the Houston energy conference, he ruled out a cut in output that many had hoped for to shore up crude prices.
Reducing low cost production in order to bolster supply will lead to nowhere but to defer the inevitable outcome, Al-Naimi said. Freeze is the beginning of a process, he said. “That means if we can get all the major producers to agree not to add additional barrels, then this high inventory we have now will probably decline in due time. It’s going to take time.”
At a meeting last week, Saudi Arabia, Russia, Qatar and Venezuela agreed to freeze output at January levels on condition that other major producers followed suit. “We had one meeting, four countries agreed,” Al-Naimi said. “We sent emissaries to other countries. There is a lot of talk, and hopefully sometime in March, there will be another meeting and probably gather more agreements on freezing.” Al-Naimi said freezing output was more realistic than cutting because not many countries are going to deliver, even if they say they will cut production. “There is a common sense and there is a need for more money, and I think those two things will cause, maybe not all of the countries, but most of the countries that count to freeze,” including Iran, he said.
Al-Naimi said that the Kingdom seeks to achieve stability in the oil markets and permanently communicate with all the major producers, in an attempt to reduce volatility to reach a collective consensus and would welcome any collaborative work. “We remain committed to meeting a large part of global energy demand on a purely commercial basis, we do not seek to acquire a larger share in the market.”
