Saudis, Russia Seen by Iraq as More Flexible on Oil-Output Cuts

  • Crude seen rising to $50 in second half: Iraq oil minister
  • OPEC strategy is working, Kuwait acting oil minister says

Saudi Arabia and Russia, the world’s biggest oil producers, are now more flexible about cooperating to cut output as crude prices have fallen to levels that hydrocarbon-rich nations didn’t foresee, Iraq’s Oil Minister Adel Abdul Mahdi said.

“This flexibility should be finalized, and we should hear some solid suggestions coming from all parties,” Abdul Mahdi told reporters at a conference in Kuwait City. He didn’t give details about what the increased Saudi and Russian flexibility entailed, nor did he say how he knew about it.

Benchmark Brent crude dropped for a third year in 2015 and is down 19 percent this year. OPEC, which supplies about 40 percent of the world’s oil, abandoned production limits in December and is continuing to pump into a glutted market. The Organization of Petroleum Exporting Countries is targeting high-cost oil producers in an effort to squeeze the most expensive oil out of the market as countries including the U.S. and Russia have boosted output in recent years.

OPEC can’t cut production to balance the market unless other producers cooperate with it, and the group may not need to do so as its strategy is working, Anas Al-Saleh, Kuwait’s finance minister and acting oil minister, said Tuesday at the conference in that nation’s capital. Brent gained as much as 0.9 percent, to $30.78 a barrel, and traded at $30.66 at 11 a.m. in London.

OPEC’s 13 members didn’t expect prices to fall to $30 a barrel, and some are struggling, Abdul Mahdi said. Oil prices may rise to $50 a barrel in the second half this year, he said.