Oil ministers from Saudi Arabia, Qatar, Venezuela and Russia agreed to keep production at January’s levels on Tuesday, but only as long as other major producers do the same. Iran said it would back any measures to stabilize the markets, but avoided committing to capping its own production. So unless Iran also commits, it could put the agreement on hold.
This deal could be the first joint OPEC and non-OPEC deal in 15 years aimed at tackling a growing glut and helping prices recover.
Saudi Arabia convinced its fellow OPEC members that it was not in the group’s interest to cut oil output however far prices may fall. Suppliers from outside the Organization of Petroleum Exporting Countries should cut “irresponsible” output, U.A.E. Energy Minister Suhail Al Mazrouei said in Abu Dhabi yesterday. Even if non-OPEC producers were to offer cuts, OPEC probably wouldn’t follow suit, Saudi Oil Minister Ali Al-Naimi said. The biggest oil producers outside OPEC are the U.S. and Russia.
Oil fell about 20 percent since OPEC chose to maintain its production target at a Nov. 27 meeting, seeking to defend market share rather than prices. The highest U.S. crude output in at least three decades is contributing to a glut that Qatar estimates at 2 million barrels a day.
Hard-hit countries like Iran, Russia and Venezuela suspected the move was a coordinated effort between the oil kingdom and its longtime ally, the U.S., to weaken their foes’ economies and geopolitical standing.
Best English Tutor in Town
A brutally honest assessment of a notorious and insanely wicked direct sales cult
Data Analysis blog
