Higher production could give it more leverage during talks in September when both OPEC and non-OPEC producers are expected to revive a freeze deal to support oil prices, the sources say.
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It was not immediately clear on Monday how Iran would react to the agreement between Russian Federation and Saudi Arabia.
Some analysts, however, said using hard negotiating tactics could backfire on Riyadh.
In their meeting, the Ministers recognized the importance of maintaining their ongoing dialogue about current developments in oil and gas markets and indicated their mutual desire to further expand their bilateral relations in energy.
In other words, it is likely any Opec production curbs would simply play into the hands of non-Opec producers, especially in the United States, where thousands of capped wells can be brought into production relatively quickly should prices show any sign of a sustained rise.
Energy ministers Alexander Novak and Minister Khalid al-Falih met Monday on the sidelines of the Group of 20 nations’ summit in China.
The statement said that oil suppliers now face long-term challenges on the global oil market, including significant drop in capital expenditures in oil production worldwide, delay of investment projects. However, we have seen promises of co-operation before.
The amount of crude supplied to the market in July was 10.75 million bpd, above actual output as Saudi drew down the additional barrels from its huge inventories, SPA reported.
Comments from Indonesian finance minister Sri Mulyani Indrawati on CNBC that she was “comfortable” with crude prices at Dollars 40- USD 45 a barrel, have also added pressure on prices.
Iran, OPEC’s third largest producer, has said it would only cooperate in talks to freeze output if fellow exporters recognised its right to fully regain market share.
“Saudi Arabia’s position hasn’t changed”.
OPEC will hold informal talks in Algeria this month and member countries are scheduled to officially meet in Vienna in November.
The Saudis are not alone in raising production.
And even if Opec members including Iran were to agree a production freeze – and comply with it – Saudi could still lose out. Prince Mohammed made his comments three days after Putin said he’d like Opec and Russian Federation to agree to freeze crude supply to steady the market.
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Its output now hovers near an all-time high of 10.85 bpd and Russian officials expect it to edge up further next year.
