KUWAIT CITY (AFP) – Gulf oil producers led by Saudi Arabia will likely reject output cuts at an OPEC meeting next week unless they are guaranteed their market share in a highly competitive market, analysts say.
The stance of Kuwait, Qatar, United Arab Emirates and Saudi Arabia is seen as crucial for a positive OPEC decision on reducing supplies to boost crude prices, which have shed a third of their value since June.
The four pump a total 16.2 million barrels per day, or 52 per cent of the 12-member Organisation of Petroleum Exporting Countries, but they account for two-thirds of the cartel’s exports, according to figures from OPEC and other agencies. “OPEC members are looking at Saudi Arabia, Kuwait and UAE to shoulder the bulk of any production cuts, and they can,” said Kuwaiti oil expert Kamel al-Harami.
“But it is extremely unlikely for Gulf states to accept output cuts unless other OPEC members take the initiative… They need assurances other OPEC or non-OPEC producers won’t fill the gap,” said the former oil executive.
“It is not in the interest of the Gulf states to cut output because they risk losing highly valuable market share,” he told AFP. Oil prices have crashed to four-year lows on dampening demand from a combination of factors including a sluggish world economy.