Saudi Arabia has agreed with Russia to freeze oil output if joined by other major producing countries in a bid to address oversupply and stall the collapse in prices.
The Financial Times reports Saudi Arabia’s oil minister Ali al-Naimi said an output freeze by the major producing nations should start to curb the price decline, which has dropped roughly 70 per cent since the middle of 2014.
The deal was reached at a closed meeting in Doha, supported by Opec members Qatar and Venezuela.
According to reports, Opec member Iran is understood to be the biggest opponent of the deal, which would see output held at January levels.
Venezuelan oil minister Eulogio del Pino is said to be travelling to capital Tehran this week to meet with representatives from Iran and Iraq in an attempt to convince them of its merit, according to the FT.
Following an immediate 6 per cent upward spike on news of the deal, Brent crude fell back to just below $33 per barrel on Tuesday.
Critics said the deal – the first orchestrated attempt to control supply since Saudi led the cartel in maintaining production in 2014 – was purely symbolic and getting the opponents on side would be a challenge.
Naimi is reported as saying: “Freezing now at the January level is adequate for the market, we believe . . . we recognise today the supply is going down because of current prices. We also recognise that demand is on the rise.”