Saudi Arabia and Russia, the two largest crude oil producers in the world, have agreed to freeze output and are expected to hold talks with oil ministers of Iran and Iraq to discuss their buy in, media reports said.
Russian Energy Minister Alexander Novak and Saudi Oil Minister Ali al-Naimi met in the Qatari capital of Doha to work out a deal to fix production at this January 11 level.
While Qatar and Venezuela have agreed to participate in the deal, the freeze is conditional on other nations such as Iran and Iraq. Oil prices fell in London after rising before the talks on anticipation of a production cut.
“After the meeting four countries – Russia, Saudi Arabia, Qatar and Venezuela – are willing to freeze oil production at the level of January, if other manufacturers join the initiative,” the Russian Energy Ministry reported his words, according to Tass.
Earlier, Russia’s Energy Minister Alexander Novak said that the subject of the possible consultations in February of OPEC and non-member oil producers could be the reduction of oil production. Prior to that, Transneft Chairman of the Board and President of Transneft Nikolai Tokarev said Saudi Arabia proposed such consultations, according to Tass.
The Organization of Petroleum Exporting Countries (OPEC) decided not to cut production more than a year ago, pushing prices lower. Oil prices are hovering at around 70 percent lower from mid-2014. The International Energy Agency has said the world is awash in with oil.
Iran, which had economic sanctions lifted last month, has said it would increase production and exports by 1 million barrels/day. Tehran is unlikely to change its stance due to political differences with Saudi Arabia and its need to get back into the market after years of forced exit.