Russia and Saudi Arabia will face “dire consequences” if they increase their oil production, the head of the state energy firm said.
“Member nations of the Organisation of Petroleum Exporting Countries (OPEC) and the leading non-OPEC oil producer Russia, should maintain the Algiers Pact they forged in September 2016 so that oil prices will continue to ramp up,” Sonatrach CEO Abdelmoumen Ould Kaddour said.
“A fall in the price per barrel won’t serve the interests of the big oil producers,” Kaddour stressed.
Kaddour’s remarks came following the conclusion of the World Gas Conference (WGC) which was held in the American capital of Washington DC.
He explained that it was difficult to anticipate how the market would integrate with a possible increase in crude oil output from major producers, referring to Saudi Arabia and Russia. “We do not know how the market will react but prices will surely decrease.”
“The Vienna meeting [4th OPEC meeting] sought to maintain production. Since Venezuela and Libya failed to produce, OPEC countries decided to increase their output by one million barrels to compensate,” Sonatrach’s CEO noted, adding: “This is why prices stand at the same level.”
The proposal to raise oil output, Kaddour pointed out, is to be discussed during the next joint committee meeting of OPEC and non-OPEC producers which will be held in Vienna on 22 September.
Moscow and Riyadh recently announced their desire to pump more oil after a relative hike in prices, suggesting a 1.5 million barrel per day increase in the production starting next September.
On Saturday, the US President Donald Trump said on Twitter that he had agreed with the Saudi King Salman Bin Abdelaziz that the leading OPEC nation would increase oil output by two million barrels.
Oil prices rose yesterday after the spread of concerns over the fact that the US sanctions on Iran would block a large amount of crude from global markets.