Speaking from an energy conference in Houston, Saudi Oil Minister Ali al-Naimi was quoted by Houston Public Media as saying finding a coordinated solution to lower oil price may require producers to “really work hard”.
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He also said that a proposed freeze in output at January levels, which were near record highs, would require “all the major producers to agree not to add additional barrels”.
OPEC wants to dialogue with USA oil producers, regarding the low prices and the current situation of the global oil market, OPEC Secretary General Abdalla Salem El-Badri said Monday. “Even if they say they will cut production, they will not deliver”.
The call for a freeze puts “unrealistic demands” on Iran, which is planning to boost output by 1 million barrels a day this year after worldwide sanctions were lifted, said Oil Minister Bijan Namdar Zanganeh.
Last week, however, OPEC members reached a tentative agreement with non-OPEC Russia to freeze output at January levels. The move has been chalked up as a long-term play at maintaining OPEC’s share of the global oil market. While production is projected to go down by 600,000 barrels per day (bpd) this year and a further 200,000 bpd next year, it is expected to increase again in 2018.
But “I think that June may be a little too soon for an agreement and September might see true OPEC member quotas”, said Williams.
While Iran initially said it supported the output freeze, Zangeneh’s comments on Tuesday suggest the country has no desire to join.
Nigeria, Africa’s biggest oil producer, has been suffering from a slump in crude prices that has eroded vital oil revenues and hammering its currency.
Though not explicitly mention, al-Naimi’s comments are believed to have referred to the United States’ shale industry and Canada’s oil sands – the two most expensive producers in the world.
He also said that contrary to popular belief, the Saudis have “not declared war on shale” or on production from any country or company.
“Without concrete actions (to cut production), we remain highly sceptical that prices could be moving higher”, Singapore-based brokerage Phillip Futures said.
“We had one meeting, four countries agreed”, Naimi said.
Oil prices dipped slightly in early trading on Tuesday after posting strong gains the previous session on the back of an expected drop in USA production, but which analysts expect to be countered by rising output from Iran.
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Data from the Texas Alliance of Energy Producers indicate that a year ago more than 70,000 jobs were lost in the oil exploration and production sector.
