Saudi oil minister discusses oil markets with Russia, Brunei

Saudi Arabian Oil Minister Ali Al Naimi discussed oil markets with Russia's ambassador to Riyadh Oleg Ozerov, Saudi state news agency SPA reported.

In the meeting, which was attended by Al Naimi's adviser Ibrahim Al Muhanna, Al Naimi and Ozerov exchanged views about recent oil market developments as well as ways to develop oil cooperation.

Al Naimi had a separate meeting with the ambassador of Brunei to Riyadh Dato Haji Abd Mokti Mohd Daud, and they held similar discussions, SPA reported.

Last week, Al Naimi said the kingdom stood ready to "improve" prices, but only if other producers outside Opec joined the effort.

Opec agreed to maintain production at its meeting last November in spite of pressure to curb output and stabilize sliding prices, after discussions with Russia and Mexico ended without agreement.

Opec production totaled 30.72 mmbbl/d in March, up 800,000 b/d from February, and the highest monthly volume since November 2012.

Saudi Arabia, which exports significant amount of crude to Asia, boosted production by 280,000 b/d to 10 mmbbl/d from 9.72 mmbbl/d in February, according to Platts.

Asia receives an estimated 68% of Saudi Arabia's crude oil exports with Japan, China, South Korea and India being the top four importers.

Last year, the Arabic state shipped 5.7% less oil overseas, led by its biggest customer, China and in December 2014, exports dropped 5% from November to 6.9 MMbbl/d, Bloomberg Business reported. “The month-on-month increase for March is a big one that provides a lot of food for thought,” said Margaret McQuaile, senior correspondent for Platts. “Given Minister Naimi's comments last week, Saudi Arabia looks set to keep production around 10 mmbbl/d. But can Iraq sustain this higher level and what about Libya. Will we see another increase in April or will it be more of the same, up one month, down the next.”

Al Naimi expects production to continue around the 10 mmbbl/d level. Its capital city, Riyadh, told OPEC last month that it had produced 9.636 mmbbl/d in February.

Riyadh will remain willing to work with other major oil producing and exporting countries to stabilize world oil markets and boost prices, Minister Al-Naimi said in a meeting last week.

Libyan production rose by 210,000 b/d to 480,000 b/d in March, despite the continued political chaos and the emergence of the Islamic State in North Africa, Platts noted.

Although output from other countries, including Iran, was largely stable, Iranian Oil Minister Bijan Namdar Zangeneh has asked OPEC to reduce production by 5% to lift oil prices.

However, Saudi’s Al-Naimi has said previously that the country will not reduce oil production to hold up oil prices. This next OPEC meeting will be held in Vienna, Austria, in June.

The article was first published in the Saudi Gazette