Saudi Energy Minister Khalid al-Falih said on Monday global oil producers may have to reduce production by one million barrels per day – and his own country would take the lead.
Addressing an energy conference in the United Arab Emirates, Falih, head of the rotating presidency of OPEC, said Saudi Aramco would commit to a 500,000-bpd cut starting next month.
“We need a reduction approaching one million bpd to balance the market,” Khalid al-Falih told a ministerial committee of OPEC and Non-OPEC states in Abu Dhabi, AFP reported.
The Trump administration announced last week that waivers would be granted to eight jurisdictions for the continued import of Iranian oil, among them Turkey, India and China.
Saudi Arabia, a key US ally, had earlier pledged to bump up production to compensate for the impending blacklisting of Iranian crude.
“The request America made to Saudi Arabia and other OPEC countries is to be sure that if there is any loss of supply from Iran, that we will supply that. And that happened,” Crown Prince Mohammed bin Salman told Bloomberg on October 3.
The kingdom was blindsided by the waivers, Reuters reported, citing multiple industry and OPEC sources. Crude prices have dropped approximately one-fifth since early October.
Falih said any decision would be voted on at an upcoming OPEC meeting in Vienna, Austria on December 6.
“Right now we shouldn’t be making any hasty decisions,” Russian Energy Minister Alexander Novak told CNBC.
Moscow leads a group of non-OPEC oil producing states which have been collaborating closely with the cartel since November 2016, in a partnership originally aimed at reducing oversupply.
The next OPEC and non-OPEC ministerial meeting will convene in Vienna on December 4, just ahead of the OPEC summit.
“We need to look at the situation very carefully to see how it will develop so that we don’t end up changing our course by 180 degrees every month,” Novak said.