Oil producers decide against further rise in output
Trump had called for Opec to take action to cool prices near $80 a barrel
The world’s biggest oil producers led by Saudi Arabia and Russia have decided against an additional rise in output, despite calls from US President Donald Trump for further action to cool prices near $80 a barrel.
“The OPEC monopoly must get prices down!” Mr Trump wrote on Twitter on Thursday.
Opec countries and their allies are meeting in Algeria to discuss output policy to offset the impact of a drop in Iranian oil exports. US sanctions on Tehran’s energy industry, which are due to come into effect in November, are beginning to restrict supplies.
“I do not influence prices,” Saudi Arabia’s energy minister Khalid Al Falih told reporters in Algiers ahead of a meeting of energy officials, which is separate from the twice-yearly formal ministerial gatherings.
A fall in Iranian barrels, as buyers cut purchases for fear of US financial penalties, has boosted the price of international oil benchmark Brent crude. It has also prompted Mr Trump to blast the cartel, with US officials anxious about the potential effect on domestic fuel prices ahead of midterm elections in November.
Mr Falih added on Sunday that he believed the oil market was “adequately supplied”.
Global oil producers including Opec, Russia and other allies outside the cartel agreed in late 2016 to cut supplies by 1.8m barrels a day to bring the market back into balance after a multiyear downturn.
But supply was cut by more than intended, after unexpected falls in Venezuelan output and disruptions elsewhere, so in June producers agreed to an increase to make up for the cuts that went beyond what was agreed in 2016.
Oman’s oil minister Mohammed Al-Rumhy and his Kuwaiti counterpart Bakhit Al-Rashidi told reporters on Sunday that further action beyond what was agreed in June was not required.
Oil traders and energy sector analysts have raised questions about how big the drop in Iranian supply will be and how much big producer nations will be able to raise supply to compensate.
Although Saudi Arabia said after the ministerial meeting in June that the global oil market should expect a 1m barrel a day increase in the coming weeks and months, increases have fallen short of this level.
“We can produce significantly more than we are producing today if there is demand,” Mr Falih said, adding that the kingdom had sufficient spare output capacity. “The biggest issue is not with the producing countries, it’s with the refiners, it’s with the demand.”
Iran’s oil minister Bijan Zanganeh, who did not attend the meeting on Sunday, has criticised Opec rivals who have boosted their supply to take advantage of Iran’s situation.
“I hope [Mr Trump’s] threats will not scare my Opec colleagues and encourage them to carry out America’s orders,” Mr Zanganeh told state news organisation SHANA.