KUWAIT CITY: The Kuwaiti and Iraqi oil ministers said on Tuesday that Opec will not cut production unless producers outside the cartel do the same, despite the plunge in crude prices.
“Opec cannot cut its production unless there is a similar reduction by producers outside Opec,” Kuwait’s acting oil minister, Anas al-Saleh, told reporters on the sidelines of an oil conference.
“I don’t see any logic in Opec cutting production while non-Opec (countries) don’t cut,” Saleh said.
Iraqi Oil Minister Adel Abdulmahdi said Baghdad was “ready to cooperate” on cutting production to raise oil prices, but only if non-Opec producers did so as well.
The Organisation of the Petroleum Exporting Countries (Opec) has refused to cut production despite a drop in oil prices to 13-year lows.
Led by Gulf producers, the cartel is refusing to reduce crude output as it seeks to drive less competitive players, including US shale producers, out of the market.
Oil prices rose above $30 a barrel on Tuesday after a brief dip as the market was beset with worries about the global supply glut.
The Iraqi minister told the conference that at the current crude price, the majority of producers are selling oil at lower than the cost price.
He warned that if the energy crisis continues for a long time, prices could rebound strongly.
“If the energy crisis continues for a long period and investments drop, the price rebound will be sudden and strong,” Abdulmahdi said.
“The problem will become that of demand rather than oversupply.”
The minister said that the price of oil is expected to rise gradually to around $50 a barrel in the second half of this year.
Nizar al-Adsani, CEO of national oil firm Kuwait Petroleum Corp, said investment in global exploration and production dropped 20 per cent in 2015 from $850bn the previous year.
It is projected to drop 18pc more this year, Adsani said.