Saudi Arabia may freeze crude production—if everybody else does too: Prince Turki

Saudi Arabia could still agree to a deal to freeze oil production — as long as all other oil-producing nations do the same, the country’s Prince Turki Al-Faisal told CNBC Friday.

Major oil-producing countries will meet in Algiers this month to discuss market conditions. Members of the oil-producing cartel OPEC, plus Russia, are expected to hold discussion on the sidelines about the possibility of an output freeze to boost prices.

Several deals have fallen through in the past, in particular because Saudi Arabia — OPEC’s de facto leader — remains wedded to keeping output high to hold market share. However, Saudi Arabia is not alone in scuppering deals, including in February, when Iran refused to join forces with Saudi Arabia, Russia, Qatar and Venezuela in freezing output.

“What Saudi Arabia is seeking is a holistic approach to the issue of oil production and prices, not just within OPEC,” Al-Faisal told CNBC on Friday from the Ambrosetti Forum on economics in Italy.

“All oil producers should have a role in whatever decision is taken … everybody should play their part,” the prince, who was previous head of the Saudi intelligence service and ambassador to the U.S., later added.

WTI crude futures for October have rallied sharply this year, but remain far below the levels above $100 per barrel at which oil traded prior to the commodities slump that began in July 2014. OPEC’s decision to maintain high levels of production while international demand growth waned is viewed as a major cause behind the rout.

Al-Faisal told CNBC on Friday that a return to high oil prices would be against the interest of poorer oil-importing countries in Africa, Asia and Latin America.

“Saudi policy since OPEC was established is that prices should be reasonably set so that the buyer can afford them,” he told CNBC.

The deputy prime minister of Russia — another major oil-producing country — told CNBC on Friday that a “good” price for crude was between $50 and $70 per barrel. Arkady Dvorkovich added that Russia was “ready to sign to have a (crude production) deal.”

WTI crude futures traded at between $43 and $44 per barrel on Friday.

Source: CNBC