Big oil producers to freeze output

Top oil exporters Russia and Saudi Arabia agreed on Tuesday to freeze output levels but said the deal was contingent on other producers joining in — a major sticking point with Iran absent from the talks and determined to raise production.

The Saudi, Russian, Qatari and Venezuelan oil ministers announced the proposal after a previously undisclosed meeting in Doha — their highest-level discussion in months on joint action to tackle a growing oversupply of crude and help prices recover from their lowest levels in more than a decade.

The Saudi minister, Mr Ali al-Naimi, said that freezing production at January levels — near record highs — was an adequate measure and he hoped other producers would adopt the plan. Venezuela’s oil minister Eulogio Del Pino said more talks would take place with Iran and Iraq on Wednesday in Tehran.

“The reason we agreed to a potential freeze of production is simple: it is the beginning of a proc-ess which we will assess in the next few months and decide if we need other steps to stabilise and improve the market,” Mr Naimi told reporters.

“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,” he said.

Oil prices jumped to $35.55 per barrel after the news about the secret meeting but later pared gains to trade below $34 as expectations for an immediate deal faded.

It was the first attempt by Opec and non-Opec exporters to control production after almost 19 months of oil price declines.

Oil prices have tumbled about 70 per cent since June 2014, hit by oversupply, sluggish demand and worries about the global economic outlook. The prices came under renewed pressure by the return of Iran to world markets after the lifting of international sanctions linked to its nuclear programme.

“We believe, the four of us, that freezing now at that January level is adequate for the market,” the Saudi minister said.