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Saudi Arabia says no need for oil summit

Sources said Riyadh believes it is best not to interfere in the market at present

Published: Updated:

Top oil exporter Saudi Arabia sees no need to hold a summit of producing countries’ heads of state if such discussions would fail to produce concrete action toward defending oil prices, sources familiar with the matter said on Thursday.

The comments followed a meeting of Gulf Arab oil ministers with Qatar’s emir in Doha, at which a Venezuelan proposal for an OPEC and non-OPEC summit was discussed.

Oil prices have more than halved since summer last year on an oversupplied market as well as a decision by OPEC to defend market share and discourage competing supply sources, rather than cut its output in the face of cheaper crude.

Riyadh believes it is best not to interfere in the market at present, the sources told Reuters on condition of anonymity.

One OPEC source said that should such a meeting produce no concrete outcome, it would have a negative impact on prices.

“If we are meeting for the sake of meeting, it would backfire,” the source said.

Unwavering

Earlier on Thursday, Qatar’s energy minister said members of the Organization of the Petroleum Exporting Countries and non-OPEC producers were studying the Venezuelan proposal. “But we are in the study phase,” Qatar’s Mohammed al-Sada added.

Cash-strapped Venezuela has for months been pushing for an emergency OPEC meeting with Russia to stem the tumble in prices.

The price of Venezuela’s barrel had dropped to $39 on Thursday.

Non-Gulf members want OPEC to take action. Algeria has written to OPEC expressing concern about the market and Iran has supported the idea of an emergency meeting.

But the Gulf OPEC members have opposed holding an early meeting and show no sign of changing strategy.

OPEC last held a heads-of-state summit in Saudi Arabia in 2007, when oil prices were on their way to a record high of $147 a barrel reached a year later.

Gulf oil sources see no sign of Saudi Arabia wavering particularly when other OPEC members such as Iraq are raising production, and Iran is gearing up to boost exports by next year.