Saudi, Venezuela Meeting Ends With No Oil-Production Agreement
Saudi Arabia’s Ali al-Naimi calls meeting ‘successful,’ despite lack of agreement needed by Venezuela
DUBAI—Saudi oil minister Ali al-Naimi met with his Venezuelan counterpart on Sunday but didn’t announce any plans for the production cut the South American country says is needed to prop up crude prices.
Venezuela’s Eulogio del Pino traveled to Riyadh this weekend as part of a tour of oil-producing countries both within and outside of the Organization of the Petroleum Exporting Countries, including Iran and nonmember Russia. Mr. del Pino wants Saudi Arabia, the world’s largest oil exporter, to come around to his call for an output reduction that could bring the world’s vast supply of oil back in line with demand.
Mr. Naimi called the meeting “successful,” with a “positive atmosphere,” according to the state-run Saudi News Agency. Mr. del Pino, on his official Twitter page, said the meeting was productive and focused on cooperating to “stabilize the international oil market.”
OPEC and non-OPEC “countries must reach a consensus to bring stability to the global oil market,” Mr. del Pino said on Twitter.
But neither said there was an agreement to slash oil output. Neither mentioned Mr. del Pino’s call for an emergency OPEC meeting to discuss such a cut, an idea Saudi Arabia has opposed.
Oil prices have fallen more than 70% from their peak of $114 a barrel in June 2014, hitting $27 a barrel in January and now hovering around $35 a barrel.
The oil-market swoon has devastated the economies of oil-producing countries such as Venezuela, where government officials say revenues plunged 70% and the economy shrank 5% in 2015. Venezuela’s 2016 budget is based on a price of $40 a barrel. The country’s heavy oil was priced at $25.27 a barrel in the week ending Friday, according to the oil ministry.
That has put pressure on Saudi Arabia to return to its traditional role as a so-called swing producer, raising and cutting production to regulate prices. Saudi officials have said they believe production cuts would be ineffective given booming American oil output and decided instead to open up the kingdom’s own taps to near record levels and fight for market share.
In recent weeks, Saudi Arabia has signaled a willingness to pull back on near-record production levels, but not on its own. Iraq has said it would join a coordinated cut from its own record output, and poorer OPEC members like Venezuela and Algeria have been calling for action for months.