Saudi minister: Oil producers agree to cooperate beyond 2018

MUSCAT: Global oil producers are in agreement that they should continue cooperating on production after their deal on supply cuts expires at the end of this year, Saudi Arabia’s energy minister Khalid al-Falih ( said yesterday.

It was the first time Saudi Arabia, the world’s top oil exporter, had publicly stated Opec (Organisation of Petroleum Exporting Countries) and non-Opec producers would keep cooperating after 2018.

The exact mechanism for cooperation next year has not yet been decided, Falih said, but if oil inventories increase in 2018 as some in the market expect, producers might have to consider rolling the supply cut deal into next year.

“There is a readiness to continue cooperation beyond 2018 ... the mechanism hasn’t been determined yet, but there is a consensus to continue,” Falih said after a meeting of the joint ministerial committee which oversees implementation of the cuts.

The committee comprises Saudi Arabia, Kuwait, Venezuela and Algeria, plus non-Opec producers Russia and Oman. The United Arab Emirates was also present yesterday as it holds the presidency of Opec.

Before the meeting, Falih said extending the cooperation framework beyond 2018 wouldn’t necessarily mean sticking to countries’ current production targets.

The agreement was launched last January and Saudi Arabia has accounted for by far the largest share of the output cuts.

Falih said a deal on production levels after 2018 would be about “assuring stakeholders, investors, consumers and the global community that this is something that is here to stay. And we are going to work together”.

Kuwait’s oil minister Bakheet al-Rashidi said yesterday’s meeting focused on compliance with the current agreement on output cuts, and discussion of the deal’s future was expected to occur in June, when Opec and other producers led by Russia are next scheduled to meet on oil policy.

Falih said the global economy had strengthened while the supply cuts had shrunk oil inventories around the world. As a result, the oil market was on course to rebalance towards the end of 2018 or in 2019.

But he stressed that producers still had a lot of hard work ahead to restore the market to health.

The next meeting of the joint ministerial committee overseeing implementation of the cuts will be held in April in Saudi Arabia, an Opec statement said. – Reuters