From the Field
Saudi to deny output freeze
HOUSTON, February 24, 2016 – Saudi Arabia will not follow deal brought forward by other major oil producers to freeze rising output, the country’s oil minister, Ali Al Naimi, said at a conference in Houston Tuesday.
He said he was confident that more nations would join in supporting a cap of output at January levels, but that it wasn’t going to happen soon. The official said the currently strained market would stabilise in time and that competitors should “find a way to lower their costs, borrow cash or liquidate.”
“There is less trust than normal,” the minister said during a question and answer session. “Even if [countries] say they will cut production, they will not do it. There is no sense in wasting our time seeking production cuts. They will not happen.”
Oil prices fell almost 4% on Tuesday. Brent crude dropped USD 1.33 a barrel to USD 33.35.
Recently OPEC members Saudi Arabia, Qatar and Venezuela joined with Russia in a provisional output freeze if other major producers would agree.
The Saudi official’s words comes after Iran’s oil minister, Bijan Zanganeh, called the halt in output “laughable,” according to a local news agency. Iran recently joined countries on calling for a curb in production.
Saudi Arabian production in the kingdom has been greater than 10 million bpd for over a year.
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