Oil producers address glut in supply

Top global oil producers met in Doha, Qatar on Tuesday to discuss measures to tackle a supply glut that has sent oil prices to record lows.

Following the meeting, oil prices rose on Tuesday with Brent breaking past 34 US dollars a barrel on expectations that energy heavyweights will put aside their differences and work together on restricting output to end the current glut on world markets.

“It is a beginning of a process which we will assess in the next few months and decide whether we need other steps to stabilise and improve the market,”
Saudi Arabian Oil Minister, Ali Al-Naimi said.

Oil prices have dropped below 30 dollars a barrel in recent months, a fall of 70 per cent since 2014.

The steep decline is due to over supply, slow demand and apprehension over global economic outlook.

“We will start intensive communication almost straight away with other major producers, OPEC, non-OPEC, including Iran and Iraq,” Mohammed Saleh Al Sada, Qatar’s minister of energy and industry said.

However, there are fresh fears of oversupply after Western powers lifted sanctions against Iran a major oil producer, in January.

Iran said that it plans to add to its production, which stands at 3.1 million barrels per day despite the drop in price, and should not be blamed for further price falls.

Two of Africa’s biggest oil producers, Nigeria and Angola have been adversely affected by the oil prices which have dropped below 12-year lows amid a global supply glut.

The 13-member body supplies about 40 per cent of the world’s oil.