OPEC’s six-month agreement to trim crude oil output in order to rebalance the market could be extended, Saudi Arabia’s energy minister Khalid Al-Falih said on Thursday at a conference in Abu Dhabi.
A preliminary agreement has been reached over the extension, but does not yet include all ministers, Al-Falih said, speaking at the GCC Petroleum Media Forum.
The extension to the deal could be for three months, and not necessarily six months, he added, noting that reducing stocks was “top priority.”
OPEC agreed last November to cut oil output by a combined 1.2 million barrels a day (mbd), as part of efforts to tackle the market oversupply and boost prices.
The producer group is expected to decide whether the agreement should be extended at its upcoming meeting on May 25.
Oil producers in the Gulf have been hit hard by the plunge in crude prices, which began in mid-2014. Since then, members of the six-nation Gulf Cooperation Council (GCC) have taken various fiscal measures such as cutting subsidies to address growing deficits.
However, crude oil production is not the region’s only source of revenue, Kuwaiti oil minister Issam Almarzooq said at the forum.
“Diversifying petroleum products is key. The US has surpassed us by several steps in this regard (diversification) but we always learn from the experiences of others,” he added.
Write to Reem Abdellatif at reem.a@argaam.com and
Jerusha Sequeira at jerusha.s@argaamnews.com
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