Qatar’s energy minister said the world’s big oil producer countries had reached a conditional agreement to freeze production at January levels.
Mohammed Bin Saleh Al-Sada said the provisional deal, announced after a meeting of oil ministers from Saudi Arabia, Russia, Venezuela and Qatar, would be contingent on major producers following suit, reports Anjli Raval, the FT’s Oil & Gas Correspondent.
“We believe this step will stabilise the market,” he said, according to Reuters.
In a news conference in Doha after the meeting, Ali Al Naimi, the Kingdom’s powerful oil minister, said the meeting was successful . Since global supply is already declining as a result of current prices, a freeze in output at levels from the start of the year was “adequate” for the market, he told reporters.
Despite the agreement, oil prices pared their gains. The global Brent benchmark increased 40 cents to $33.84 a barrel after reaching as high as $34.51 a barrel ahead of the meeting.
Venezuela’s oil minister said he would meet his counterparts from Iran and Iraq on Wednesday.
As oil prices languish near lows last seen in 2003, Eulogio Del Pino has led a push for a meeting of ministers from Opec and non-Opec producers to stem the slide in prices to 2003 lows, that has decimated the budgets of producer countries.
Although the decision will be welcomed by some in the oil market, others have pointed to the fact that many Opec producers are pumping at full capacity already.
The group’s production has surged by more than 1m barrels a day since Opec in November 2014 decided not to cut output to shore up the price of oil that had been spiralling lower.
Saudi Arabia and its Gulf allies made a case for not reducing production and losing market share, which would only benefit rivals with higher-cost output.
Mr Naimi said he hoped producer countries inside and outside Opec would adopt this proposal. He added “We will assess in [the] next few months the next steps to stabilise [the] market.”