"Irresponsible" levels of output by producers from outside the OPEC oil cartel is among the main causes of the slump in prices, the United Arab Emirates energy minister charged Sunday.
Oil-rich Arab Gulf countries stood firm against non-OPEC crude producers on Sunday, vowing they will not cut output nor hold an emergency cartel meeting to support slumping prices.
OPEC kingpin Saudi Arabia and Kuwait said they would not cut production even if non-OPEC members reduce their output, while the United Arab Emirates and Iraq shrugged off calls for an emergency meeting of the group.
“If they (non-OPEC countries) want to cut production they are welcome. We are not going to cut, certainly Saudi Arabia is not going to cut,” Saudi Oil Minister Ali al-Naimi told reporters on the sidelines of an energy conference in the United Arab Emirates.
Kuwaiti Oil Minister Ali al-Omair agreed.
“I don’t think we need to cut. We gave a chance to others and they were not willing to do so,” Omair said, in a clear reference to shale and sand oil producers from North America and elsewhere.
“OPEC will not cut. Nothing will happen until June and there is no emergency meeting,” he said.
The global oil market has become increasingly competitive in recent years with the surge in shale and sand oil production from countries outside the decades-old alliance of the Organisation of Petroleum Exporting Countries.
World oil prices have fallen almost 50 percent since June, mainly due to a supply glut, the weak global economy and a strong US dollar.
UAE Energy Minister Suhail al-Mazrouei was emphatic that OPEC, which pumps a third of global crude supplies, will not make any move soon to shore up the market.
“We will not interfere with market fundamentals and do something that is a short fix,” he said.
“We need at least six months” to assess the market and “even if nothing happens when we meet after six months, we will not change our position,” Mazrouei said.
Iraqi Oil Minister Adel Abdulmahdi also ruled out calls for an OPEC emergency session.
“We have to wait and see the reactions of the oil markets and other countries,” Abdulmahdi said, adding that he believes oil prices will stabilise around $60 a barrel.
Saudi Arabia, Kuwait, the UAE, Qatar and Iraq pump around 20 million barrels a day, or two-thirds of OPEC output.
The cartel decided last month to maintain its production unchanged at 30 million barrels per day, which led to a slump in oil prices.
– No Saudi ‘plot’ –
The benchmark Brent oil price is hovering around $60 a barrel after losing almost half of its value since June.
Gulf ministers blamed “irresponsible” non-OPEC producers for the plunge in prices, but voiced confidence markets would rebound.
“One of the main causes is irresponsible production by some producers from outside the organisation,” the UAE’s Mazrouei said.
Naimi lashed out at non-OPEC members, blaming the global price fall on a “lack of cooperation by main producing countries outside OPEC, misleading information and speculators’ greed”.
The Saudi minister said some high-cost unconventional producers will not be able to continue under low oil prices.
Analysts have said Saudi Arabia is content to see shale oil producers — and even some OPEC members such as Nigeria and Venezuela — suffer from low prices rather than reduce output to boost prices.
But Naimi dismissed claims of a Saudi “plot” to push prices down for political reasons, insisting that the kingdom’s policy is “based on pure economic principles”.
Russia and OPEC-member Iran, whose economies rely heavily on oil revenues, have spoken of a market conspiracy to hold prices down after OPEC’s decision to keep output steady.
Gulf countries are forecast to lose at least half their income from oil, or around $350 billion a year, at current price levels.
But Gulf bourses on Sunday rallied for the second day in a row, as oil prices steadied.
The Dubai Financial Market surged 9.9 percent, Qatar was 7.6 percent higher and the Saudi bourse rose 2.5 percent. Abu Dhabi shares increased 3.5 percent, Kuwait added 3.3 percent, while the small markets of Oman and Bahrain rose 5.5 percent and 1.4 percent respectively.