Saudis set to maintain oil output levels
Persian Gulf oil-producers, led by Saudi Arabia, are set to keep their current rate of crude production, analysts revealed on Tuesday.
Several analysts, polled by AFP in several countries in the Persian Gulf, believe that Arab oil-producing countries will resist attempts to cut output at the next month meeting of the Organization of the Petroleum Exporting Countries (OPEC).
An economist from Saudi Arabia, Abdulwahab Abu-Dahesh, said that “preserving market share still remains a top priority for (Persian) Gulf states."
"This time they are even encouraged by signs their November strategy is working after a drop in US shale oil production and in the number of rigs.”
A resolution by the 12-member OPEC not to cut production in November 2014 sent crude prices crashing 60 percent before a partial recovery in recent weeks.
The impacts of the sudden crash are slowly starting to take their toll on the economies of countries that depend on oil as the biggest source of their revenues.
OPEC members have in the past called on the organization to cut oil production as it will help stabilize prices, but to no avail.
Some countries impacted by the global supplies glut charge Saudi Arabia with deliberately dragging down the true price of oil to settle political scores.
“I don’t think that any change will happen at OPEC’s meeting,” a former member of Kuwait’s Supreme Petroleum Council, Musa Maarafi, said.
“(Persian) Gulf states will continue to defend their market share and it is their right to do so. They will not accept to cut output at their own expense unless an agreement is reached with non-OPEC producers," Maarafi predicted.
The burden of any cut in OPEC production would likely fall on the group’s Persian Gulf members including Saudi Arabia, Kuwait, the UAE and Qatar, whose output has risen by almost 4 million barrels a day since 2011.
The International Energy Agency (IEA) said earlier this year that OPEC’s output hit 31.21 million barrels per day (bpd) in April, the maximum level since September 2012.
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