Saudi Arabia’s oil minister dismissed talk of a price war as having “no basis in reality” in his first public comments since crude plunged into a bear market last month.
“Saudi oil policy has remained constant for the past few decades and it has not changed today,” Ali al-Naimi was quoted by Bloomberg as saying at a conference in Acapulco, Mexico. “We want stable oil markets and steady prices, because this is good for producers, consumers and investors.”
Saudi Arabia remains committed to seeking a stable oil prices and speculation of a battle between crude producers has no basis, Al-Naimi said.
Saudi discounts offered to Asian customers in October triggered speculation that Saudi Arabia had changed policy and was seeking to preserve market share, instead of supporting prices by curbing supply.
“Talk of a price war is a sign of misunderstanding -- deliberate or otherwise -- and has no basis in reality,” al-Naimi said at a natural gas forum. “Saudi Aramco prices oil according to sound marketing procedures -- no more, no less.”
Saudi Arabia’s official selling prices to Asia, which were reduced last month to the lowest in six years and increased this month, “take into account a host of scientific and practical factors, including the state of the market, refinery margins and long-term relationships with customers,” he said. Besides these adjustments, “Saudi Arabia does not set the oil price, the market sets the price.”
OPEC Diplomatic Meetings
OPEC producers are stepping up their diplomatic visits before the group’s meeting in Nov. 27 in Vienna.
Bijan Namdar Zanganeh, the oil minister, delivered a message to Kuwait on behalf of President Hassan Rouhani. Zanganeh briefed Kuwaiti Emir Sheikh Sabah Al-Ahmad Al Sabah on developments in oil markets, IRNA reported. He also went to Qatar.
Libyan Prime Minister Abdullah al-Thani flew to Riyadh on Thursday just as Iraqi President Fouad Masoum left the kingdom after a two-day visit where he met with King Abdullah.
Rafael Ramirez, Venezuela’s foreign minister and representative to OPEC, held talks in Algeria and Qatar.
Saudi Arabia’s Oil Minister Ali Al-Naimi toured Latin America.
Falling oil prices are straining state budgets among OPEC members, including Iraq’s government, which is leading a costly war against Islamist militants, and Libya that is struggling to keep crude output steady amid political divisions and violence.
Algeria and Venezuela also discussed oil markets and re-affirmed a joint position to defend prices, Venezuelan Foreign Minister Rafael Ramirez said after a meeting in Algiers with Abdelaziz Bouteflika, the north African country’s president.
He also went to Qatar where he discussed crude with Middle East country’s Prime Minister Abdullah bin Nasser bin Khalifa Al Thani and Energy Minister Mohammed Bin Saleh Al Sada. He is also scheduled to travel to Iran and Russia.
