Kuwait welcomes Saudi-Russia oil cooperation – World’s biggest producers pledge to stabilize oil output

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DUBAI, Sept 5, (AFP): Kuwait and the United Arab Emirates on Monday welcomed an agreement by the world’s two biggest oil producers Saudi Arabia and Russia to try jointly to stabilise oil prices.

Kuwait “welcomes the consultations between Saudi Arabia and Russia about oil markets… and backs the outcome of these consultations for the sake of achieving a balance in the markets”, acting oil minister Anas al-Saleh told the official KUNA news agency.

“The consultations come in the framework of cooperation among major OPEC and non-OPEC producers… to regulate and stabilise markets,” said the minister of OPEC’s fifth largest producer.

Emirati Energy Minister Suhail al-Mazrouei also hailed the “positive step”.

OPEC-member UAE “is keen on supporting and contributing to any common efforts aimed at achieving balance in the oil market”, he said in remarks cited by WAM state news agency.

A joint Russian-Saudi statement said they “noted the particular importance of constructive dialogue and close cooperation between the largest oil-producing countries with the goal of supporting the stability of the oil market and ensuring a stable level of investment in the long term”.

The comments by Saudi Energy Minister Khaled al-Faleh and his Russian counterpart Alexander Novak came after a meeting at the G20 summit in China.

“To this end the ministers agreed to act together or in cooperation with other oil producers,” their statement said, adding they had agreed to set up a “joint monitoring group” to offer recommendations aimed at preventing price fluctuations.

However, there were no details in the announcement about any elusive agreement to freeze oil output, just weeks before Moscow and OPEC meet in Algeria to discuss the crisis.

The oil market has been plagued by a stubborn supply glut that saw prices plunge to near 13-year lows below $30 at the start of 2016.

While it has recovered recently, the per barrel market price is still well off highs of above $100 seen in mid-2014.

The two nations “noted the particular importance of constructive dialogue and close cooperation between the largest oil-producing countries.”

This should have “the goal of supporting the stability of the oil market and ensuring a stable level of investment in the long term,” the energy ministers from both countries said.

Their comments came in a joint statement after a meeting at the G20 summit in China.

“To this end the ministers agreed to act together or in cooperation with other oil producers,” the statement said, adding they had agreed to set up a “joint monitoring group” to offer recommendations aimed at preventing price fluctuations.

Russia’s Energy Minister Alexander Novak described the announcement as marking a “new era” in cooperation between Russia and Saudi Arabia and insisted it would have a “critical significance” for oil markets, news agency Interfax reported.

But there were no details on any agreement to freeze oil output, just weeks before Moscow and OPEC meet in Algeria to discuss the crisis.

The globe’s major oil producers have been unable to strike a deal on freezing output, due mainly to a dispute between fierce regional rivals Saudi Arabia and Iran over Tehran’s desire to raise production levels after the lifting of sanctions.

Novak said Moscow and Riyadh were discussing “concrete parameters” to halt price fluctuations but repeated that Iran should be allowed to return its output to pre-sanction levels.

But Saudi Energy Minister Khaled al-Falih told Al-Arabiya television channel there was “currently no need to freeze production” after meeting Novak.

“A freeze is one of the preferred options but it is not needed for the moment,” he said.

Russian President Vladimir Putin met Saudi Deputy Crown Prince Mohammed bin Salman on the sidelines of the G20 on Sunday and said they would work to address a global glut and overproduction that has hammered prices for the past two years.

In an interview ahead of the meeting Putin — whose economy slumped into recession on the back of oil price falls — said that a freeze was “the right decision” and called for “compromise”.

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