The United States is “not in a position” to dictate the Organization of Petroleum Exporting Countries (OPEC)’s policies, Saudi Arabia’s energy minister, Khalid Al-Falih, said yesterday.
“Washington is not in a position to tell us [Saudi Arabia] what to do,” Al-Falih told reporters ahead of an OPEC meeting in the Austrian capital of Vienna. “I do not need permission from anyone to cut oil output.”
On Wednesday, US President Donald Trump urged OPEC member states to continue pumping oil at current high levels. “Hopefully OPEC will be keeping oil flows as is, not restricted. The World does not want to see, or need, higher oil prices!,” Trump said on Twitter.
Hopefully OPEC will be keeping oil flows as is, not restricted. The World does not want to see, or need, higher oil prices!
— Donald J. Trump (@realDonaldTrump) December 5, 2018
“We’re looking for a sufficient cut to balance the market, equally distributed between countries [OPEC members],” the Saudi minister pointed out.
“A million barrels cut would be ideal,” Falih explained, without specifying whether the proposed reduction was below the output quota agreed by OPEC late 2016.
“Ideally, everyone should join equally. I think that’s the fair and equitable solution,” he added.
On his part, the Iranian oil minister, Bijan Zanganeh, said that his country would not cut in oil output beyond what has been already reduced due to the US sanctions.
“This is the first time an American president tries to tell OPEC what to do,” he noted, stressing: “They [US administration] should know that OPEC is not part of their state department.”
OPEC’s daily output of crude stood at 32.99 million barrels in October, according to the International Energy Agency (IEA). In November, Saudi Arabia, OPEC’s largest producer, announced an increase in production.
While some analysts see a million barrels per day cut in production would not be enough to restore balance to the markets, oil prices were reported to have fallen by 5 per cent just after the Saudi minister’s statements.
At 10:35 (Greenwich Mean Time Zone) yesterday, the price of North Sea Brent crude, due to be delivered in February, fell to $58.62, losing $2.94.
Zanganeh noted that the barrel’s price “would be better to stand at $60-70,” stressing that the proposed price was “acceptable for most OPEC countries.”