Top officials from Saudi Arabia and the United Arab Emirates (UAE) have said oil supplies were sufficient and stockpiles were still rising despite anticipated drops in output from Iran and Venezuela.
Speaking at the start of a meeting of top crude producers in Jeddah on Sunday, Saudi Energy Minister Khalid al-Falih said the market was in a “delicate situation” but “inventories are rising and supplies are plenty”.
“None of us wants to see the [oil] stocks swell again,” he said, with reference to a supply surplus that sent prices sharply lower in the second half of last year.
“We have to be cautious,” he said, adding that members of the Organization of the Petroleum Exporting Countries (OPEC) would not make hasty decisions about output ahead of a meeting of the cartel scheduled for June.
The meeting, between ministers of OPEC+, which includes Russia and other non-OPEC producers, came amid worries over a volatile oil market following tensions between Iran and the United States in the Gulf.
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US President Donald Trump last month demanded that buyers of Iranian oil – including India, China and Turkey – stop purchasing by the beginning of May or face sanctions in a bid to bring “Iran’s oil exports to zero” and deny Tehran “its principal source of revenue”.
The move came three months after Trump imposed sanctions on Venezuela’s oil industry as part of his administration’s bid to ratchet up pressure on embattled President Nicolas Maduro.
Iran did not send a representative to Sunday’s meeting.
At the end of the gathering, al-Falih told a news conference the OPEC+ nations were “unanimous in continuing to work to achieve stability between supply and demand”.
He said there was consensus among the oil producers to drive down crude inventories “gently”.
OPEC+ agreed to reduce output by 1.2 million barrels per day from the beginning of this year for six months in a bid to stop inventories building up.
Suhail al-Mazrouei, United Arab Emirates’ energy minister, said there was no need to relax that deal.
“As UAE we see that the job is not done yet, there is still a period of time to look at the supply and demand and we don’t see any need to alter the agreement in the meantime,” al-Mazrouei said.
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On Sunday, Alexander Novak, Russia’s energy minister, said ministers had recommended continued monitoring of the market due to current uncertainties and that full recommendations would be made at the OPEC meeting next month.
Novak also said the option of easing agreed cuts had been discussed and that the supply situation would be clearer in June, including from countries under sanctions.
Oil prices edged lower on Friday due to demand fears amid a standoff in US-China trade talks, but ended the week higher on rising concerns over disruptions in Middle East shipments due to heightened political tensions between Washington and Tehran.
Friction between US-ally Saudi Arabia and Iran was also running high last week after attacks on two Saudi oil tankers off the UAE coast and another on Saudi oil facilities inside the kingdom.
Riyadh accused Tehran of ordering the drone strikes on oil pumping stations, for which Yemen’s Iran-aligned Houthi group claimed responsibility. The UAE has blamed no one for the tanker sabotage.
Iran has distanced itself from both sets of attacks.
“Although it has not affected our supplies, such acts of terrorism are deplorable,” al-Falih said.
“They threaten uninterrupted supplies of energy to the world and put a global economy that is already facing headwinds at further risk.”