Oil producers and consumers reached consensus that stable oil prices, about $10 a barrel below current levels, would benefit the world economy, but did not agree upon a solution for reaching the lower levels, after meeting in Riyadh for the seventh annual producer-consumer dialogue from November 17th to 19th.
On November 20th, Saudi King Fahd bin Abdul-Aziz al-Saud said that the conference was part of his country’s “tireless efforts and active role in achieving international cooperation to stabilize the world economy by creating lines of contact.”
He indicated that the Saudi proposal to set up a permanent secretariat in Riyadh to promote ongoing communication between producers and consumers would “increase transparency and open more channels for dialogue and contact.”
Details have yet to be formalized, but the next conference is scheduled for 2002 in Tokyo. U.S. Energy Secretary Bill Richardson said on November 19th that: “I would agree that a consensus seems to be emerging that a price range around $25 is best for producers and consumers.”
Iranian Oil Minister Bijan Namdar Zaganeh also said that: “We believe that most of the consumer countries are comfortable with $25 a barrel.” Saudi Oil Minister Ali Naimi said that: “The disagreement [between producers and consumers] is really specifically on price and also on … supply. We have these differences but they are healthy. That’s what dialogue is about.”
While OPEC agreed at its November 12th meeting to maintain current production levels until the group’s next meeting on January 17th, Naimi said that: “We can easily put about 1.8 million b/d in the market in 90 days. There is no squeeze in Saudi capacity.”
Naimi reiterated that the kingdom and other producers would be able to make up for any shortfall in supplies due to disasters or political actions. “Saudi Arabia has always said and continues to say we are ready to produce what it takes to bring stability to the market,” he said.