Bloomberg: Saudi Arabia will only freeze oil production if Iran joins

Friday, April 1, 2016 - 20:35 (EEST) Section: Latest news

Saudi Arabia will only freeze its oil output if Iran and other major producers do so, the kingdom`s deputy crown prince said, challenging the country`s main regional rival to take an active role in stabilizing the over-supplied global crude market, Bloomberg reported.
The warning by Mohammed bin Salman, 30, who has emerged as Saudi Arabia`s leading political force, leaves the outcome of a meeting between the Organization of Petroleum Exporting Countries (OPEC) and other big oil producers this month in question, according to Bloomberg.
Iran has already said it plans to boost its production after the lifting of sanctions following a deal to curb the country`s nuclear program.
”If all countries agree to freeze production, we`re ready,” bin Salman said in an interview with Bloomberg. ”If there is anyone that decides to raise their production, then we will not reject any opportunity that knocks on our door.”
The meeting of oil producers in Qatar on April 17 follows a gathering in February between Saudi Arabia, Qatar, Russia and Venezuela in which the quartet tentatively agreed to cap their production at January`s level. The deal, which helped to lift the price of benchmark Brent crude above $40 a barrel from a 12-year low of $27.10 a barrel in January, was contingent on other countries joining it.
Iranian Oil Minister Bijan Namdar Zanganeh will attend the Doha discussions but won`t join a production freeze, according to a person familiar with the nation`s policy, Bloomberg said.
Traders and analysts have speculated that Riyadh could be ready to voluntarily cap its output at the current level of about 10.2 million barrels a day even if Iran doesn`t join. But asked during the five-hour interview in a royal compound in Riyadh whether Iran needed to take part, bin Salman said, ”without a doubt,” according to Bloomberg.
”If all countries including Iran, Russia, Venezuela, OPEC countries and all main producers decide to freeze production, we will be among them,” he said.
The latest comments from Riyadh mean the Doha meeting was ”looking more and more pointless,” said Abhishek Deshpande, oil analyst at Natixis SA in London, Bloomberg reports.
”What is becoming very clear is that Saudi Arabia is serious about moving away from the traditional play of adjusting prices by cutting or freezing supplies by itself,” he said.