Saudi oil minister Ali Ibrahim Naimi said Tuesday producers will hopefully meet in March to negotiate an output freeze, but production cuts will not happen.
Last week, Saudi Arabia, Russia, Qatar and Venezuela proposed a freeze that would cap production at January levels. Russian Energy Minister Alexander Novak said Saturday the deal, which is contingent on other producers participating, should be finalized by March 1, Reuters reported.
“Freeze is the beginning of a process, and that means if we can get all the major producers to agree not to add additional balance, then this high inventory we have now will probably decline in due time. It’s going to take time,” Naimi said.
“It is not like cutting production. That is not going to happen because not many countries are going to deliver even if they say they will cut production — they will not deliver. So there is no sense in wasting our time seeking production cuts,” he added.
Naimi made his comments following a keynote speech at the IHS CERAWeek conference in Houston, his first U.S. appearance since Saudi Arabia led OPEC’s current high production policy more than a year ago.
Asked by CNBC whether he believed speculation about an output cut would continue to affect the price of oil, he declined to comment.
Oil prices had surged on the prospect of OPEC and non-OPEC members capping production, but the rally stalled on Tuesday on doubts that a freeze would significantly reduce oversupply.