Ali al-Naimi – who oversees the world’s largest exporter of crude – said in an interview that even if the price of oil fell to $20 per barrel the kingdom would do nothing to arrest the decline.
"Whether it goes down to $20, $40, $50, $60, it is irrelevant," he said in an interview with Middle East Economic Survey (Mees).
Mr Naimi’s remarks sent oil prices back into reverse after finishing last week firmer. Brent crude fell over 2.3pc to trade below the $60 per barrel range.
The minister – who is the most powerful voice with the Organisation of Petroleum Exporting Countries (Opec) – said that the cartel had changed its strategy from defending a certain price to focusing on retaining its market share.
"As a policy for Opec, and I convinced Opec of this, even Mr al-Badri (the Opec Secretary General) is now convinced, it is not in the interest of Opec producers to cut their production, whatever the price is," Mr Naimi told Mees.
In recent years, Opec members have lost market share in the US where the growing presence of shale drillers has spurred an energy revolution. In addition, the opening of new oil basins in the Arctic and in South America has threatened to pour a flood of crude onto the market.
For years, Opec has attempted to defend prices at around $100 per barrel, a figure that was thought to be vital for the cartel’s petrodollar economies.
Opec’s decision in late November to keep pumping at a rate of 30m barrels per day (bpd) triggered a rout in oil prices that has also seen billions of dollars wiped off the value of energy stocks. Prices have fallen more than 45pc since June.
However, Mr Naimi may come under growing pressure from within the cartel as more of the group’s members begin to suffer economic distress from the fall in prices. Venezuela and Iran are both struggling with crippled economies, while Iraq needs higher prices to help pay for rebuilding after decades of war.
Original Article
Source: telegraph.co.uk/
Author: Andrew Critchlow
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