Riyadh Sets Conditions for Oil Output Freeze Deal

Riyadh Sets Conditions for Oil Output Freeze Deal

Saudi Arabia’s Deputy Crown Prince, Mohammed bin Salman, said that Riyadh will only freeze its oil output if Iran and other major producers do so, while challenging the country’s main regional rival to take an active role in stabilizing the over-supplied global crude market, Bloomberg wrote.

The warning by the deputy crown prince leaves the outcome of an upcoming meeting between the Organization of the Petroleum Exporting Countries (OPEC) and other big oil producers in mid April in question, as Iran had already maintained that it will not contribute to any freeze until its crude exports return to pre-sanction levels.

In light of the announcement, Reuters reported that oil prices tumbled about 4%. Data thus suggested that the global crude glut was likely to continue growing given shaky foundations for an agreement in Doha.

Brent crude settled down $1.68, or 4.1%, at $39.09 a barrel, while US crude settled down $1.55, or 4%, at $36.79 a barrel. Previously, over the past six weeks, oil rallied in a rebound from 12-year lows, after major producers within and outside OPEC floated the idea of freezing output at January’s highs.

In related news, the Saudi prince has announced that the kingdom seeks to reduce its heavy dependence on oil, amid a drop in world prices that has sent shock waves through the Saudi economy, informed The New York Times. The plans include publicly selling shares of the state oil giant, Saudi Aramco, and routing much of its wealth into a public investment fund, said the prince. The fund could become the world’s largest, he added, with more than $2t in assets.

Login

Welcome! Login in to your account

Remember me Lost your password?

Lost Password