(Reuters) – Saudi Arabia Oil Minister Ali al-Naimi broke months of silence to reaffirm the kingdom’s longstanding policy of seeking stable global markets on Wednesday, dismissing talk of a “price war” but offering no insight on his response to tumbling crude prices.
In his first public comments since global oil prices dived to four-year lows near $80 a barrel, Naimi said the world’s biggest producer wanted to work “with other producers to ensure price stability for the interest of producers, consumers and the industry at large”.
“Talk of a price war is a sign of misunderstanding, deliberate or otherwise, and has no basis in reality,” Naimi told an event in the Mexican Pacific resort of Acapulco.
He made no mention of position ahead of a pivotal meeting of the Organization of the Petroleum Exporting Countries (OPEC) on Nov. 27, where producers will consider whether to cut output to shore up prices that have slumped over 30 percent since June.
Instead, he reiterated several of the kingdom’s familiar talking points: that stable markets are good for producers and consumers; that the market, not Saudi Arabia, ultimately sets prices; and that its monthly export price formula is set according to a range of marketing factors, nothing more.
Oil markets have tumbled on growing speculation that Saudi Arabia is more concerned with maintaining market share than supporting prices, with some traders pointing to reductions in the kingdom’s monthly oil price formula as evidence.
Naimi also dismissed this notion, saying: “Saudi Aramco prices oil according to sound marketing procedures, no more and no less. These take into account a host of scientific and practical factors, including the state of the market.” By David Alire Garcia (Editing by Simon Gardner, Jonathan Leff and Marguerita Choy)