Saudi minister upbeat on oil prices

The global oil market is improving and stabilising, the Saudi oil minister Khalid Al Falih said in Baghdad yesterday.

In a speech at the opening of the Baghdad International Exhibition, Mr Al Falih praised the co-operation between Iraq and Saudi Arabia, which he said had helped to boost global oil prices.

Speaking later he said Saudi Arabia and Iraq were in agreement on the need to “fully comply” with cutbacks in crude output agreed by Opec, Russia and several other producers to push up prices. “The market has improved a lot but has still some way to go,” he said.

Mr Al Falih is the first Saudi official to make a public speech in Baghdad for several decades.

“The best example of the importance of co-operation between our two countries is the improvement and stability trend seen in the oil market,” said Mr Al Falih, to applause from the audience of Iraqi ministers, senior officials and businessmen.

Saudi Arabia and Iraq are the largest and second-largest producers in Opec, respectively.

The Iraqi oil ministry said Mr Al Falih and his Iraqi counterpart, Jbbar Al Luaibi, agreed to co-operate in implementing decisions by oil exporting countries to curb global supply in order to lift crude prices further. Opec, Russia and other producers have reduced production by about 1.8 million barrels per day (bpd) since the start of 2017, helping to boost oil prices. The cutbacks should continue until March 2018.

Negotiations to prepare for Opec’s November 30 meeting are taking their lead from the Russian president Vladimir Putin’s tentative backing for a further nine months of curbs, the group’s secretary general Mohammad Barkindo said at the Oil & Money conference in London last week. The comments signal not only the growing chance of an extension of the cuts, but also how far Russia and Saudi Arabia are working together to lift oil prices.

Iraq and Saudi Arabia began taking steps towards detente in 2015 after 25 years of troubled relations starting with the Iraqi invasion of Kuwait in 1990. Tension remained high after the 2003 US-led invasion of Iraq, which toppled Saddam Hussein.

Iraq is seeking economic benefits from the thaw with Riyadh while Saudi Arabia hopes closer ties to help to rollback Iran’s influence in the region. A Saudi commercial aircraft, operated by Flynas, a domestic and international low-cost airline based in Riyadh and the country’s first budget airline, arrived in Baghdad on Wednesday for the first time in 27 years.