According to reports, talking to media during the meeting of Organisation of Petroleum Exporting Countries (OPEC) in Vienna, the oil minister said that the whole idea is that there will not be any shortages in the oil market.
“That has been Saudi Arabia’s policy all along, to manage stability of the oil market, keeping it in balance.”
The minister agreed to adhere to its 30 million barrels per day output ceiling, saying it will roll back production of 1.6 million barrels per day over that.
Opec members will also reduce the group’s output to adhere to its 30 million barrels per day output ceiling and the effects should be seen in July, Opec secretary-general Abdullah El Badri told a news briefing on Friday.
The Opec agreed at a meeting in Vienna on Thursday to maintain the 30 million bpd production ceiling. El Badri said that would entail curbing actual supplies by 1.6 million bpd.
“We overproduced by 1.6 [million barrels per day], now we decide to take out the 1.6 and stay with the 30 million,” he said. “Everybody will respect that.”
“Maybe this will start some time in July. You need some time,” he added. The Opec did not issue individual member quotas as part of the 30 million bpd production agreement, which it adopted at its last meeting in December.
But El Badri said group members, except for Iraq and Libya, had their own individual output allocations based on the group’s November 2011 production, which were agreed at the December meeting last year. “It is not a quota,” he said. “The most important thing for me is the 30 million bpd,” he added.
Saudi Arabia, Opec’s top producer, says it will comply with the new agreement, but stopped short of saying that it would reduce supply. Riyadh has been pumping around 10 million bpd — a 30-year high — for several months running.