More oil producers called for higher prices, but firm action to reverse some of the 25 per cent fall in the market in 1993 was still not forthcoming at the end of the first week of January (see Cover Story).
Oman’s Petroleum & Minerals Minister, Said Bin Ahmad al-Shanfari, was due to leave on a second tour of non-OPEC states in an effort to win support for production cuts. Oman has reduced its output by 5 per cent since the start of the year.
The second tour will include Malaysia and Brunei. In December, Shanfari’s visit to Yemen, Egypt, Syria, Norway, the UK and Russia produced mixed results. Yemen said it supported the Omani initiative. However, Norway refused to its cut production, which is now at a record of more than 2.5 million barrels a day (b/d), without action by OPEC. Russia said it was ready to co-operate in stabilising prices, but did not make a commitment to lower output.
Al-Shanfari plans to travel to Mexico after visiting Malaysia and Brunei. He plans to present a report on the results of the non-OPEC tour to the five other member states of the GCC. The GCC summit in December called for co-ordinated action to stabilise prices.
The attempt to bolster prices came as prices reached their lowest levels in five years. On 31 November, the price for February futures of Brent Blend crude oil was about $13.20 a barrel.
Analysts say they expect OPEC to take action in the first quarter to cut output and drive prices up to $3 a barrel higher. They say that OPEC states cannot afford present oil price levels. Saudi Arabia and Oman announced in January cuts in planned spending in 1994, measures influenced by the low level of oil prices (see Oman and Saudi Arabia). An Iranian MP said on 4 January that the assumption that oil prices will average $14 a barrel in the next fiscal year, which starts on 21 March, was unrealistic (see Iran).