Saudi Arabia says door open to future oil output hike after Donald Trump calls for immediate action to reduce prices

Algiers: Supply to the global oil market remains "satisfactory", Saudi Arabia's energy minister Khalid al-Falih said Sunday, after calls by US President Donald Trump for an immediate hike in output to reduce prices. But Falih — attending a meeting of oil producers in Algiers — left the way open to a future production hike, as supplies tighten due to the US imposing sanctions on Iranian oil from November 2018.

 Saudi Arabia says door open to future oil output hike after Donald Trump calls for immediate action to reduce prices

Representational image. Reuters

"While the supply/demand balance remains satisfactory, we continue to watch closely...and we'll respond appropriately and in a timely manner as necessary," said Falih, who chairs a joint committee of OPEC and non-OPEC countries. "It is critical that we continue to foresee and anticipate changing market supply and demand balances and take proactive actions to avoid conditions that could make (oil) consumers uneasy and anxious," he added.

The OPEC cartel in December 2016 concluded an agreement with non-member states — including Russia — to reduce output in order to arrest sliding prices. Sunday's meeting in Algiers brought together OPEC oil ministers and non-OPEC signatories to the 2016 agreement, as they seek to extend their cooperation. Trump has repeatedly called for a hike in production by countries other than Iran to reduce oil prices, which have partially recovered since the December 2016 agreement, to trade close to $80 per barrel in October.

"We protect the countries of the West Asia, they would not be safe for very long without us, and yet they continue to push for higher and higher oil prices!" Trump tweeted on Thursday. "We will remember. The OPEC monopoly must get prices down now!" Russia's energy minister Alexander Novak on Sunday appeared to back a continuation of the partnership between OPEC and non-OPEC member states. "We need to give serious thought to expand our partnership beyond this year to tackle the new challenges that appear ahead of us," he said.

After pulling out of the 2015 Iran nuclear deal in May 2018, the Trump administration has pledged to impose an embargo on Iranian oil from 5 November. Iran's OPEC representative Hossein Kazempour Ardebili on Sunday said his country was continuing to meet its OPEC quota share. "We (Iran) are continuing to produce our share of production," he said. "I expect all countries to exercise their sovereignty and not to abide by the instructions of Trump", he added.

But output from Iran has hit its lowest level since July 2016, according to the International Energy Agency, as top buyers India and China distance themselves from Tehran in anticipation of the US sanctions.

Updated Date: Sep 24, 2018 10:50:23 IST