Saudi oil minister rules out production cuts

24 February 2016

Ali Ibrahim Naimi said that a meeting had been scheduled in March to discuss a freeze

Saudi Arabia’s oil minister Ali Ibrahim Naimi has said that the kingdom will not cut oil production. 

Speaking at an industry event in the US on 23 February, Naimi said that while the kingdom will not cut production, a meeting between exporters to discuss an output freeze had been tentatively scheduled in March.

The oil minister said on Tuesday that a “freeze is the beginning of a process, and that means if we can get all the major producers to agree not to add additional balance, then this high inventory we have now will probably decline in due time. It’s going to take time”.

Saudi Arabia, Russia, Qatar and Venezuela proposed on 16 February to freeze production to January levels, with Reuters reporting that Russian Energy Minister Alexander Novak intended to have the deal finalised by 1 March, conditional upon the participation of others.

“It is not like cutting production. That is not going to happen because not many countries are going to deliver even if they say they will cut production — they will not deliver. So there is no sense in wasting our time seeking production cuts,” Naimi added.

Oil prices dropped again on Tuesday following a rally earlier this week on speculation that both OPEC and non-OPEC states would cap production. Concerns still remain about the caps ability to reduce significant oversupply.

Naimi was speaking at IHS CERAWeek in Houston, a conference of elite energy figures, in his first US appearance in over a year.

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