• 4 minutes Energy Armageddon
  • 6 minutes How Far Have We Really Gotten With Alternative Energy
  • 10 minutes Wind droughts
  • 2 days "Biden Is Running U.S. Energy Security Into The Ground" by Irina Slav
  • 2 days GREEN NEW DEAL = BLIZZARD OF LIES
  • 1 day "Natural Gas Price Fundamental Daily Forecast – Grinding Toward Summer Highs Despite Huge Short Interest" by James Hyerczyk & REUTERS on NatGas
  • 24 hours "How to Calculate Your Individual ESG Score to ensure that your Digital ID 'benefits' and money are accessible"
  • 1 day Oil Stocks, Market Direction, Bitcoin, Minerals, Gold, Silver - Technical Trading <--- Chris Vermeulen & Gareth Soloway weigh in
  • 8 days "Forget Oil, The Real Crisis Is Diesel Inventories: The US Has Just 25 Days Left" by Zero Hedge - 5 Stars *****
  • 24 hours The Federal Reserve and Money...Aspects which are not widely known
  • 5 days Is Europe heading for winter of discontent with extensive gas shortages?
  • 1 day "Europe’s Energy Crisis Has Ended Its Era Of Abundance" by Irina Slav
  • 1 day "Dodgy Demand Data? The Oil Price Collapse Conspiracy" by Alex Kimani
  • 8 days "The Global Digital ID Prison" by James Corbett of CorbettReport.com
  • 9 days Goldman Betting on Cryptocurrencies
  • 12 days Сryptocurrency predictions
How Much Has Harvard’s Fossil Fuel Divestment Cost It?

How Much Has Harvard’s Fossil Fuel Divestment Cost It?

Harvard University made headlines when…

Next Week Will Be Critical For Oil Markets

Next Week Will Be Critical For Oil Markets

The next few days will…

Oil Futures Market Points To Sluggish Demand

Oil Futures Market Points To Sluggish Demand

The structure of the oil…

Andy Tully

Andy Tully

Andy Tully is a veteran news reporter who is now the news editor for Oilprice.com

More Info

Premium Content

OPEC Calls For Widespread Production Cuts

The oil ministers of two powerful OPEC members, Saudi Arabia and the United Arab Emirates, say they had no choice but to avoid cutting production to shore up oil prices at their meeting last month because non-OPEC producers refused to do the same.

“The share of OPEC, as well as Saudi Arabia, in the global market has not changed for several years … while the production of other non-OPEC [countries] is rising constantly,” Saudi Oil Minister Ali al-Naimi said in an article published Dec. 18 in the Saudi Press Agency (SPA).

“In a situation like this, it is difficult, if not impossible, for the kingdom or OPEC to take any action that may result in lower market share and higher quotas from others, at a time when it is difficult to control prices,” al-Naimi said.

Related: Don’t Expect Low Oil Prices To Last For Long

The energy minister of the United Arab Emirates (UAE), Mohamed Faraj al-Mazrouei, agreed. Quoted by the UAE news agency WAM, he said, “No one likes the price drop, but it is not right that one party should interfere to fix the matter. [The party] responsible for the price fall [by causing the current oil glut] should contribute to fix the imbalance in the market.”

Al-Naimi represents the most productive and most influential state among OPEC’s 12 members, widely held as the most responsible for the cartel’s decision not to cut the group’s production from 30 million barrels a day during OPEC’s meeting in Vienna on Nov. 17.

Al-Naimi’s comments show he has finally decided to give in to demands that he explain his decision, which ignored pleas for production cuts by poorer OPEC members such as Venezuela and Iran, which can’t weather lower oil prices for as long as wealthier Persian Gulf countries in the cartel.

Oil prices have been plummeting since mid-June, dropping by about 30 percent at the time of the meeting and now having fallen by more than 40 percent.

Shortly before the November meeting there was some evidence that OPEC may make a deal with oil producers outside the cartel to cut production jointly in order to reduce the oil glut and stabilize prices. Representatives of Mexico and Russia were in Vienna just before the OPEC session and spoke with al-Naimi.

Related: The Hidden Costs Of Cheap Oil

After his meeting with the Russians and Mexicans, however, al-Naimi said he was left with no expectations of any cooperation on production cuts by non-OPEC producers. “[T]hose efforts were not successful,” he told SPA.

In fact, Russia, the world’s second-largest oil exporter after Saudi Arabia, said it was prepared to keep production at its current level even if the price of oil fell below $60 per barrel, $40 lower than Moscow needs to balance its budget.

This isn’t the first time Moscow and OPEC have been at odds over oil production. In the early 2000s, during his first term as Russia’s president, Vladimir Putin had promised to join OPEC in a cut in output. Instead, though, he not only reneged, he raised his country’s exports instead.

By Andy Tully of Oilprice.com

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

Back to homepage





Leave a comment
  • frank gentry on December 24 2014 said:
    FYI good reading plausible

Leave a comment




EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News