Oman became the first major non-OPEC oil producer country to say it would slash its output by up to 10 per cent in coordination with other countries, in order to stabilize the oil market. The largest oil producer in the Middle East outside OPEC had spoken to other Gulf countries about the prospects of cutting the cartel’s production.
According to a recent report published in the Wall Street Journal, Dr. Mohammad bin Hamad al-Rumhy, Oman’s Oil & Gas Minister has said that Oman would be ready to cut 5 per cent to 10 per cent of its total crude oil production, if other producers were willing to do the same to stabilize the oil market.
“Oman is ready to do anything that would stabilize the oil market,” the minister said. “5 per cent or 10 per cent is what I think we need to cut and everyone has to do the same,” he said on the sidelines of a conference in Abu Dhabi on Monday.
The OPEC members, such as Venezuela, have called for a reduction in the cartel’s oil production and have requested that other countries join them in the effort, in the hope that cuts would boost prices. Saudi Arabia, OPEC’s largest producer and de facto leader, has said it won’t cut unless other countries do too.
The newspaper also quoted United Arab Emirates’ Energy Minister Suhail bin Mohammed al-Mazrouei saying, “Anyone who is introducing more supply into the market in the current situation is going to make it worse. That’s obvious; I don’t think we need a scientist to tell you that … that’s the bad news. Does Iran have the right to do so? Yes, of course. They are a member of the Organization of the Petroleum Exporting Countries and they are entitled, all of the rights, to produce whatever they want, whether it’s 100,000 or 200,000 or 500,000 barrels per day … but is this going to help the situation? No.”
In another development, Iran has ordered a rise in oil output by 500,000 barrels a day following the lifting of sanctions, official media reported, but fellow OPEC member the United Arab Emirates said any extra crude would delay the market’s recovery.
Iranian officials have said repeatedly in recent days that they were ready to raise output by half a million barrels per day, pouring more supply into a market glut that has routed global crude prices. Tehran has not outlined what this would mean for exports but has also pledged to boost production further in the coming months.