Saudi Arabia seeks extending cooperation between OPEC and non-OPEC oil producers to shore up crude prices

Saudi Arabia's Energy Minister Khaled al-Faleh on Sunday called for extending cooperation between OPEC and non-OPEC oil producers beyond 2018 after a deal to shore up crude prices.

AFP January 21, 2018 15:54:03 IST
Saudi Arabia seeks extending cooperation between OPEC and non-OPEC oil producers to shore up crude prices

Muscat: Saudi Arabia's Energy Minister Khaled al-Faleh on Sunday called for extending cooperation between OPEC and non-OPEC oil producers beyond 2018 after a deal to shore up crude prices.

"We should not limit our efforts to 2018. We need to be talking about a longer framework for our cooperation," Faleh said before a meeting between OPEC and non-OPEC countries in Muscat.

Saudi Arabia seeks extending cooperation between OPEC and nonOPEC oil producers to shore up crude prices

The Opec logo. AFP

This is the first time OPEC kingpin Saudi Arabia explicitly calls for extending a 2016 deal between oil producers to cut back production to combat a global oil glut.

OPEC and non-OPEC countries signed a landmark agreement in November 2016 to cut output by 1.8 million barrels per day to fight huge oversupply and lift sagging crude prices. That deal was initially for six months, but the 14-member cartel and 10 independent producers have since extended it until the end of this year.

"I am talking about extending the framework that we started which is the declaration of cooperation beyond 2018," Faleh told reporters. But Faleh said the new framework for cooperation might differ from the current agreement and its production quotas.

"It does not necessarily mean sticking barrel by barrel" to the same agreement, which has helped a healthy rebound in oil prices to around $70 a barrel. It would mean "assuring stakeholders, investors, consumers and the global community that (the agreement) is here to stay". It would send the message that "we are going to work together not only with the 24 countries, but inviting more and more participants," he said.

Faleh said oil producers have not yet achieved their target of reducing world stocks to normal levels and striking a balance between supply and demand.

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