Oil-market stability will be achieved through cooperation among major producers but this will likely take time, Saudi oil minister Ali al-Naimi stated Sunday, signaling the world’s top petroleum exporter is still not prepared to take sole responsibility for propping up the oil price.
“As you know, the oil market has witnessed over its long history periods of instability, severe price fluctuations and petro-economic cycles. This is one of them,” Naimi told an energy gathering in Riyadh. “Market forces, as well as the cooperation among the producing nations, always lead to the restoration of stability. This, however, takes some time.”
The minister added that even though the global oil market has been “undergoing a period of instability for more than 12 months now…I’m optimistic about the future, the return of stability to the global oil markets, the improvement of prices and the cooperation among the major producing countries.”
Oil prices CLG6, -1.26% settled below $30 a barrel for the first time in 12 years last week as traders braced for an influx of crude from Iran following the lifting of sanctions when the market already is grappling with a global supply glut.
Saudi Arabia, a member of the Organization of the Petroleum Exporting Countries, led the group in 2014 on a new course of pumping more oil in the face of declining prices. That was a historic departure for a cartel that produces a third of the world’s oil and had historically used its muscle to keep supply scarce enough to support desirable prices.