Business

Keep Oil Flowing, Says Trump Ahead Of Oil-Exporting Nations' Group Meet

Share
7 2018 shows the headquarters of the Organization of the Petroleum Exporting Countries in Vienna Austria

Crude prices have been falling since October because major producers - including the US - are pumping oil at high rates and due to fears that weaker economic growth could dampen energy demand.

OPEC members agreed to cut oil output on Thursday, although it's unclear by how much.

The United States should not try to dictate policy to OPEC, Saudi Arabia's Minister of Energy Industry and Mineral Resources Khalid al-Falih has told reporters ahead of an OPEC meeting in Vienna. That, he said, would include production for both OPEC countries as well as non-OPEC countries, like Russian Federation, which have in recent years been coordinating their production limits with the cartel.

His comments were echoed by his Nigeriancounterpart.

Zangeneh said the estimated surplus now on the market amounted to 1.3 to 2.4 million barrels per day.

The US "is not in a position to tell us what to do", the oil minister added, a day after US President Donald Trump urged the cartel to keep the taps open so as to push prices down.

"We are hopeful that they will come around this time and understand that everyone has to cut together", an OPEC delegate said, asking not to be named.

While Saudi Arabia has indicated it is willing to cut production, its decision may be complicated by Trump's decision to not sanction the country over the killing of dissident journalist Jamal Khashoggi.

So far, Trump has supported Saudi Arabia's version of the story, which exonerates Crown Prince Mohammed bin Salman of any involvement in the murder, despite U.S. intelligence agencies allegedly telling Trump the prince was involved. Some experts say that gives the USA some leverage over the Saudis, though Al-Falih denied that on Thursday.

"We don't need permission from anyone to cut", said Falih on Thursday.

The influential oil cartel is meeting at its headquarters in Vienna, Austria, with the aim of reaching an accord over production levels for the next six months. How strongly it does so could depend on Russia's contribution, which will be determined in a meeting on Friday.

A day of talks in the Austrian capital on Wednesday concluded with a panel led by Saudi Arabia and Russian Federation - the group's most powerful members - recommending an output reduction lasting six months, Oman's Oil Minister Mohammed Al Rumhy told reporters.

OPEC, an intergovernmental organisation of 15 nations, is looking to slash oil production over fears of a glut in supply which has seen prices crashing globally in recent weeks.

Ardabili said the committee has unilaterally allowed certain members to produce above their quotas since May despite being "obliged to inform other OPEC members of any change in production and secure their consensus".

Major producers such as Russia, Saudi Arabia, Iraq, the UAE and Kuwait pounced on the occasion to produce as much oil as they could, anticipating a steep drop in Iran's exports which did not happen.

Saudi Arabia, Opec's de facto leader, has made clear that it won't shoulder the burden of trimming production alone.

The Trump administration has sought to maintain oil production to avoid a run-up in prices as it tightens sanctions preventing Iran from exporting crude.

Meanwhile, Qatar, a Saudi rival and Iranian ally, said this week it would leave OPEC in January.

Share