Saudi Arabia calls ‘urgent’ meeting of oil producers

A flame from a Saudi Aramco oil installion known as "Pump 3" is seen in the desert near the oil-rich area of Khouris, 160 kms east of the Saudi capital Riyadh, on June 23, 2008. (AFP)
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Updated 03 April 2020

Saudi Arabia calls ‘urgent’ meeting of oil producers

  • Crude prices jump after move, which Kingdom says is part of efforts ‘to support global economy in these exceptional circumstances’

DUBAI: Saudi Arabia has called an urgent meeting of the Organization of Oil Exporting Countries and other oil exporters, to discuss restoring the “desired balance” in global energy markets.

The move — which prompted a big jump in the price of oil on global markets — is part of the Kingdom’s “constant efforts to support the global economy in these exceptional circumstances, and in appreciation of the request of the President of the USA, Donald Trump, and the request of friends in the USA,” according to a statement published by the official Saudi news agency.

Global oil prices reacted immediately. Brent crude, the Middle East benchmark, increased by 20 percent, taking it back above $30 a barrel.

The price of crude has been under pressure as a result of collapsing demand due to the coronavirus crisis, and Saudi Arabia’s determination to win market share from American and Russian producers.

During an OPEC meeting in Vienna last month, the Kingdom offered to implement further cuts in oil production but Russia refused to participate.

“Saudi Arabia would like to underscore its efforts during the past period to restore balance in the oil market, as it drew support for that from 22 counties of the OPEC+, but it was not possible to reach an agreement or get consensus,” according to the official Saudi statement.

Oil industry expert Daniel Yergin said: “This represents a recognition of how much the world has changed for oil in a single month as demand falls away so dramatically, and the impact of Donald Trump becoming personally engaged.”

The Saudi call for talks came after a hectic round of communications between the US, Russia and the Kingdom.

In a message posted on Twitter after the Saudi announcement, Trump wrote: “I just spoke to my friend Mohammed bin Salman, crown prince of Saudi Arabia, who spoke with President Putin and I expect and hope that they will be cutting back approximately 10m barrels, and maybe substantially more, which will be great for the oil and gas industry.”

However, officials in Riyadh downplayed any suggestion of a commitment to specific reductions in the levels of oil output. There is no indication yet of when the “urgent” meeting of OPEC and others might happen, nor what will be on the agenda, they said.

President Vladimir Putin denied that he had spoken to the crown prince about the price of oil. Novosti, the official Russian news agency, said there was no such conversation, but added that the president had discussed falling oil prices with other OPEC members and with the US.

“The Americans are worried because of their profitability for shale oil production,” said Putin. “This is also a difficult test for the American economy.”

This week, Saudi Arabia produced more oil in a single day than at any time in its history, with 12 million barrels flowing from pumps at Saudi Aramco, the world’s biggest oil company.

Mansour bin Sultan Al-Turki, member of the Saudi Shoura Council

Updated 41 min 12 sec ago

Mansour bin Sultan Al-Turki, member of the Saudi Shoura Council

Mansour bin Sultan Al-Turki, the former security spokesman for the Interior Ministry, has been a member of the Shoura Council since October.

In 1975, he attended King Saud University for almost one year, but after hearing about the scholarship programs offered by some ministries, he applied to the Interior Ministry and was accepted for a scholarship to the US to study electrical engineering.

There, he completed a three-month English language course in San Francisco before moving to Spokane in Washington state, where he completed a bachelor’s degree in electrical engineering, graduating in 1980.

After returning to Saudi Arabia, Al-Turki joined the traffic department at the General Directorate of Public Security. He rose in military rank to the level of major general. Al-Turki served as security spokesperson for the Interior Ministry — the first position of its kind at the ministry — from 2004 until his retirement this year. He was also head of the ministry’s control and supervision center from 1994 to 2004.

Speaking to the “Alliwan” program on Rotana Khalijia satellite TV channel, Al-Turki said that when Al-Qaeda began to target Saudi Arabia in 2003, there was no spokesperson for the Interior Ministry. “Those attacks affected oil prices, and some people had the false perception that Saudi Arabia was unable to confront terrorism. So there was a need for a spokesperson who could make clear what the Kingdom was doing in that regard, and also reassure people about their country’s security capabilities,” he said.