The Saudis have put all speculation over an anticipated cut in crude production by OPEC countries to rest. It is a freeze in output at existing levels that is on the table, not a cut, Saudi Oil Minister Ali Al-Naimi was reported as saying.
The global oil glut that has brought prices tumbling down to their lowest in a decade is to be addressed over time through the freeze, which Al-Naimi hopes will be joined by other nations, and a stronger demand will help increase prices.
“A freeze is the beginning of a process. 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,” al-Naimi told the the annual IHS CERAWeek conference in Houston.
He was, however, very clear in his mind that this month’s agreement between Saudi Arabia, Russia, Venezuela and Qatar on a freeze at January levels was not a starting point for production cuts as several producing countries would not agree.
“Even if they say that they will cut production they will not do it. There is no sense in wasting our time seeking production cuts. They will not happen,” he was quoted as saying during a Q&A session.