Saudi Arabia is coming under increasing pressure to implement oil production cuts.
Last week Russia and Saudi Arabia announced a provisional plan to freeze oil production levels if other major producers went along. But by late in the week, with Iran balking as expected, both the Russians and Saudis were walking the deal back, with the Saudis categorically rejecting production cuts and the Russians averring that a ‘freeze’ actually allowed Russia to increase output.
To all appearances, the Saudis had not thought the matter through and were now sawing the branch off behind the Russians, who were in turn fleeing the scene. The freeze proposal had disintegrated into total chaos, with the Saudis clearly having blundered.
To repair fences—or at least provide clarification—Saudi Oil Minister Ali al-Naimi is scheduled to address attendees of IHS CERAWeek in Houston on Tuesday. The minister, who is considered the most influential policymaker in the industry, will face U.S. shale industry producers who have been devastated by the oil price plunge.
