President Buhari flew to Saudi Arabia earlier this week to convince the Arab oil to cut oil production hoping that it will help raise the price of oil. The mission was optimistic at best even at two of the world’s top producers, Saudi and Russia agreed tentatively to production at January output levels.
As the news started to filter in the course of the day, it became quite obvious that there wasn’t going to be a deal. Buhari’s journey to Saudi was going to be another waste of valuable time. According to foreign media reports, Saudi Arabia balked at any suggestions that oil producers should cut supplies. According to Boomberg, “Oil slipped below $32 a barrel after Saudi Arabia indicated it won’t cut oil production as other countries would be unlikely to assist in restraining output, leaving the burden of adjusting supply with high-cost producers.
Reuters also reported that Iran’s oil minister was quoted on Tuesday as saying the proposal to freeze oil production was “laughable” because it did not allow that country to regain market share it lost during sanctions. Another account from Bloomberg says Iran called a proposal by Saudi Arabia and Russia to freeze oil production “ridiculous.”
As things stand it is even unlikely that Buhari could get an oil freeze let alone a cut in output. He is off to Doha to discuss “oil price stability” whatever that means.