RIYADH, 6 January 2003 — The world’s top two oil exporters, Saudi Arabia and Russia, agreed yesterday that action was needed to bring down prices after benchmark Brent crude topped $30 a barrel in London.
Minister of Petroleum and Mineral Resources Ali Al-Naimi and Russian Energy Minister Igor Iusufov stressed the “need to restore stability to the markets and make sure they do not rise to a level which could have a negative impact on world economic growth,” the Saudi Press Agency said.
A member of the Russian delegation said the talks were part of Riyadh’s efforts to “bring prices back below $28 a barrel.”
Both sides agreed that new steps would have to be taken to bring prices back within the target range, he said.
The two ministers agreed the situation on world oil markets was “difficult” and required “concerted action by exporters to avoid any supply shortfall,” SPA said.
Iraq war jitters, a long-running strike in Venezuela and a particularly cold winter in the United States have all helped to push world prices higher in recent weeks.
In New York, the price of reference light sweet crude for February delivery rose $1.23 to $33.08 in late deals Friday.
Earlier in London, the price of benchmark Brent North Sea crude oil for February delivery rose to $30.16 a barrel from $29.49 Thursday.
In Abu Dhabi, UAE’s Oil Minister Obeid ibn Seif Al-Nasseri said the OPEC stood ready to increase production if oil prices remained above $28 a barrel in the middle of January.
“If prices stay above $28 a barrel until Jan. 14, OPEC will have to intervene and take the appropriate steps to adjust output,” Nasseri told the official WAM news agency.
The oil production quotas set by OPEC include a provision for a 500,000 barrel per day increase if prices remain above the group’s $25 to $28 target range for 20 straight days.
The mechanism has only been used once before, in October 2000. But the Emirate’s oil minister hinted that this time OPEC ministers might agree to a bigger production increase. It was down to the group’s members to “hold consultations to determine the volume of additional production,” he said.
In Doha, OPEC President Abdullah Al-Attiyah said yesterday that the group was poised to boost crude supplies by up to one million barrels per day (bpd) in a bid to tame oil prices which have rocketed to two-year highs. “An increase could be anywhere between 500,000 bpd to one million bpd...It will depend on consultations,” Attiyah, the oil minister of Qatar, said.
