Saudi Oil Minister: ‘Inefficient Producers Will Have To Get Out’
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Speaking today at the IHS CERAWeek conference in Houston, Saudi Arabian Oil Minister Ali Al-Naimi said today that the recently negotiations between certain OPEC nations and Russia to freeze oil production, “is the beginning of a process.”
“If we can get all the major producers to not add additional barrels then this high inventory we have now will decline. It is going to take time,” he said.
Declining to mention differences of opinion with Iran, Al-Naimi emphasized that he would “not waste time seeking production cuts. They will not happen.”
Instead, “freeze production, let demand rise, let some inefficient supplies decline and eventually the market will balance.”
Al-Naimi defended Saudi decisions to not cut its own output to make room for U.S. shale oil in the market. “We have not declared war on shale,” he said, “contrary to all the rumors that you hear and see.”
“Efficient markets will determine where on the cost curve the marginal barrel resides,” he said, later adding: “Inefficient producers will have to get out.”
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