Oil up as Russia, Saudi agree cooperation on price but not freeze

HANGZHOU/SINGAPORE - Agence France-Presse

Crude prices rose in Asia on Sept. 6 after Russia and Saudi Arabia pledged to work on addressing a global supply glut, although analysts said gains would be limited after the two sides provided scant detail about their plans.

The world’s two biggest oil producers Saudi Arabia and Russia said on Sept. 5 they had agreed to “act together” to try to stabilize oil prices, but failed to make headway on a production freeze.

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 G-20 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.

Iran ‘backs’ any decision for stability

Meanwhile, Iran’s oil minister also said on Sept. 6 that the Islamic republic supports “any decision” to stabilize the global oil market and that $50-60 per barrel is the desired price for most OPEC members.

“Iran supports any decision by oil producers to return stability to oil markets. The desired price for most OPEC members for oil is between 50 and 60 dollars,” said Bijan Zanganeh, according to the ministry’s Shana news agency.

He was speaking after a meeting with OPEC secretary-general Mohammed Barkindo in Tehran.

Zanganeh said $55 per barrel “brings desired, economic and beneficial oil production revenue for OPEC members, while their competitors won’t be able to increase production.”

OPEC members are due to hold an informal meeting in Algiers later this month to discuss a possible freeze in production to boost prices.