Recent comments from Saudi Arabia’s veteran Oil Minister Ali al-Naimi have dashed hopes that had been growing in some quarters that the Kingdom was about to shift direction on its oil market policy and cut production. The decision earlier this month by S&P to downgrade Saudi Arabia’s credit rating by two notches underlined the pressure that lower oil prices are placing on the Kingdom’s public finances. And a recent agreement with Russia, Venezuela and Qatar to freeze output at January levels had been taken as a sign by some that Saudi Arabia was starting to find the pain caused by lower oil prices too much to handle. But Mr. al-Naimi has repeatedly argued that the Kingdom is not willing to lower output without the burden being shared by other major oil producers, most notably Iran. With no love lost between Tehran and Riyadh, reaching such an agreement seems highly unlikely in the near-future – in Mr. al-Naimi’s own words, he doesn’t want to waste his time.
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