Russia, Saudi Arabia, Qatar and Venezuela agree oil output freezeComments Off on Russia, Saudi Arabia, Qatar and Venezuela agree oil output freeze
Russia and Saudi Arabia are among four oil producing nations to have agreed a freeze on oil production.
The deal, struck by the countries’ oil ministers, was made along with Qatar and Venezuela.
The group said they would cap production at January levels provided others followed suit.
The plan is an attempt to stem the decline in oil prices, which have plummeted by more than two thirds since hitting a peak of around $115 a barrel in the summer of 2014.
The downturn has been triggered by a glut of global supply, exacerbated by the recent lifting of sanctions on Iran, and concerns about the global economy.
The price of benchmark oil contract Brent Crude rose as much as 5% on the news before falling back. It was last flat at $33.39 a barrel.
Saudi minister Ali al-Naimi said the freeze was an adequate measure to address the tumbling oil price, which has led oil firms around the world to slash thousands of jobs, costs and investment and hurt the economies of oil-producing countries.
“The reason we agreed to a potential freeze of production is simple: it is the beginning of a process which we will assess in the next few months and decide if we need other steps to stabilise and improve the market,” he said.
“We don’t want significant gyrations in prices, we don’t want reduction in supply, we want to meet demand, we want a stable oil price. We have to take a step at a time.”
Talks with Iran and Iraq will occur on Wednesday.
The oil price drop has been a boon for drivers, with petrol prices falling to around £1-a-litre in some places.