OPEC deal can work, but ‘we tend to cheat’: ex-Saudi oil minister

OPEC’s agreement to cut production for the first time in eight years has the potential to balance the oil market, as long as everyone sticks to it, former Saudi Arabia Oil Minister Ali alNaimi said.

"The only tool they have is to constrain production," alNaimi said of OPEC at an event in Washington, DC. "The unfortunate part is we tend to cheat."

OPEC on Wednesday agreed to cut production by 1.2 million barrels a day, while Russia and other oil producers committed to reducing their own output by another 600,000. The deal spearheaded by Saudi Arabian Energy Minister Khalid Al-Falih represents a departure from the pumpat-will policy promoted by al-Naimi when he was oil minister. OPEC adopted that policy in 2014.

Al-Naimi said he wasn’t opposed to production cuts in 2014, as long as everyone participated. They wouldn’t, he said.

He also expressed scepticism that Russia would follow through on its promise to reduce output. "Will Russia cut 300,000?" he said. "I don’t know. In the past, they didn’t."

Meanwhile, OPEC will meet non-OPEC countries to finalise a global oil limiting pact on December 10 in Vienna, two sources told Reuters on Saturday.

Two OPEC sources earlier said the meeting was due to take place in the Russian capital Moscow, but later said that plan had changed.