Two years after triggering an oil price war, Saudi Arabia has seemingly had enough of cheap crude amid budget pressures, fear of a future supply shortage, and as it seeks to offload a stake in state-owned producer Aramco.
The change in tone comes as OPEC and other producers such as Russia may resume talks on stabilizing output when they meet in Algeria later this month, after a similar effort to boost oil prices collapsed in April due to Saudi-Iranian tensions.
“The Saudis are going to Algeria for a freeze,” said a source in the Organization of the Petroleum Exporting Countries who is familiar with the matter and declined to be identified.
“More and more ministers are now talking among themselves to evaluate their production position.”
OPEC in November 2014 made a landmark policy shift, led by Saudi Arabia, refusing to cut production by itself in the hope that lower prices would discourage higher-cost competitors that had eroded the group’s market share.
Further cementing the impression of a production free-for-all, OPEC ditched its last remaining supply-management tool, an output ceiling, in December 2015.
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