Minister of Petroleum and Mineral Resources Ali Al-Naimi arrived today in Abu Dhabi to lead the Saudi delegation at a meeting of the Gulf Cooperation Council (GCC) oil ministers. On arrival, Minister Al-Naimi stated that the Kingdom of Saudi Arabia will reduce its oil production by 585,000 barrels per day effective April 1, 1999, in line with the plan agreed on in The Hague, Netherlands, which advocates a total reduction of over two million barrels per day, and has informed its customers of this. He pointed out that the GCC member states had played a crucial role in formulating the Hague Plan, which he hoped would culminate in success at the OPEC meeting in Vienna, Austria, on Tuesday, March 23, 1999. He added that a number of non-OPEC states, approving the reduction of oil production, have duly informed their customers. Minister Al-Naimi noted that oil prices have improved slightly during this month, rising by $3 a barrel, and expressed the hope that prices will go up further to a reach a sum ranging between $18 and $19 before the end of this year.
In the final communiqué issued today following the meeting, the GCC expressed their support for the plan agreed upon at the meeting in The Hague on further oil production cuts by oil producers, both OPEC and non-OPEC. This came within a drive to deplete the glut in the oil market and support prices. The GCC oil ministers agreed on the following:
• The GCC oil ministers affirm the need for cooperation among all oil-producing countries, both OPEC members and non-OPEC, to enhance the low oil price and try to reach a fair price for oil per barrel.
• The current situation in the oil market of low prices and increased volume of stored oil will harm both the oil-producing countries and the oil industry, in the short and the long term, as well as generating a negative impact for the international economy. As such, it is necessary for the oil-producing countries to resolve this situation quickly in order to guarantee the growth and development of this important industry.
• The GCC member states support the plan agreed on in The Hague, Netherlands, concerning additional cuts in oil production by both OPEC and non-OPEC countries, in order to eliminate the glut in the oil market and support prices.
• The GCC states are working in cooperation with other oil-producing countries to support the Hague agreement to restore stability of the oil market and improve oil prices at the upcoming OPEC to be held on Tuesday, March 23.