Saudi Minister: We'll attempt to rein in oil price surge

Saudi Arabia plans to call for a meeting of oil producing countries and consumers to discuss ways of dealing with soaring energy prices.

cars riyadh 224.88 (photo credit: AP)
cars riyadh 224.88
(photo credit: AP)
Saudi Arabia plans to call for a meeting of oil producing countries and consumers to discuss ways of dealing with soaring energy prices and work to prevent further unwarranted increases, Information and Culture Minister Iyad Madani said Monday. The kingdom will also work with OPEC to "guarantee the availability of oil supplies now and in the future," the minister said following the weekly Cabinet meeting, held in the seaport city of Jiddah. Madani said that the kingdom has increased its output this month and has informed "all oil companies it deals with as well as countries that consume oil that [the kingdom] is ready to provide them with any additional oil they need," said Madani. The Saudi move is apparently meant to stabilize the oil market that has seen record-high oil prices and made a massive 8 percent gain Friday to US$138.54 on the New York Mercantile Exchange. The kingdom will work to ensure there will be no "unwarranted and unnatural oil price hikes that could affect international economies, especially those of developing countries," said Madani. "There is no justification for the current rise in prices," he added. On Sunday, the world's leading economies and oil consumers discussed record-high oil prices and urged oil producers to boost output, which has stalled at about 85 million barrels a day since 2005. It also called for cooperation between buyers and producers. Energy experts say most producers have little ability to expand output. The exception is Saudi Arabia, which is producing about 9.4 million barrels a day and has the ability to increase by about 2 million barrels a day, but has not done so. "The Saudi Cabinet has instructed Oil Minister Ali al-Naimi to call for a meeting in the near future that will include representatives of oil-producing countries, consumers and companies that work in extracting, exporting and selling oil to look into the price hike, its causes and how to deal with it," said Madani. The current president of the Organization of Petroleum Exporting Countries, Chakib Khelil, has said that the cartel will make no new decision on production levels until its Sept. 9 meeting in Vienna. On a trip to Saudi Arabia last month, US President George W. Bush tried to persuade Saudi leaders to significantly increase oil production. But the kingdom, the world's leading oil producer, promised only an additional 300,000 barrels of crude a day, an increase seen as minuscule.