RIYADH: Fingers remain crossed. Much is at stake, as eyes remain glued on the outcome of the ongoing deliberations between the P5+1 and Iran and the upcoming Opec ministerial.

All this is taking place in the midst of what is being described by some as the ‘Great Oil Crash.’ And the trend is not expected to go off any time soon.

“It is increasingly clear that we have begun a new chapter in the history of oil markets,” the IEA stated in its November oil market report, observing that the world’s oil supply is outstripping projected oil demand.

Prices are to go down unless taps are tightened.

Fireworks thus seem imminent when the Organisation of the Petroleum Exporting Countries (Opec) meets.

Meanwhile, confusion prevails. All sort of projections — from a large Opec production cut to a small cut to none at all — are being made.

Riyadh has a central role to play in the emerging scenario.

What would be the stance of Saudi Arabia on a possible output cut? Is Riyadh in a battle for market share or is it a part of a well thought of policy to let the prices melt, not only to hamper the growing shale business in the United States but also to make life for Moscow and Tehran more miserable?

Riyadh however, is clear — Saudi Arabia is for stable markets.

“Saudi oil policy... has been subject of a great deal of wild and inaccurate conjectures in recent weeks. We do not seek to politicise oil ... For us it’s a question of supply and demand, it’s purely business,” Minister Ali Al-Naimi was quoted as saying.

However, one thing is being made apparent: Riyadh was not willing to solely shoulder the burden of stabilising the markets.

It has made known to its fellow Opec member that all the member need to bear joint responsibility for the global oil market and that they should not expect Saudi Arabia to be the only country within Opec to cut its supplies, former oil ministry official Mohamed al-Sabban was recently quoted as saying. Unless agreement is reached on this fundamental issue, Saudi Arabia will continue defending its market share, he insisted.

Concern is but spreading. Diplomatic flurry is on. Kuwait’s cabinet and the country’s Supreme

Petroleum Council held an “extraordinary” joint meeting last week to consider measures to stop the slide in prices. This was despite the earlier Kuwait statement expressing confidence on market situation.

Iran too has been badly hit by the falling oil prices. In a statement last week, Iran’s oil minister criticised (some) countries of “trying to justify keeping oil production at the current level – which were set before countries such as Iran were allowed to return to selling oil in the global marketplace,” he emphasised.

In the back drop, Iranian Petroleum Minister Bijan Namdar Zanganeh has been undertaking visits to Gulf Arab states Qatar, Kuwait and the United Arab Emirates. Zanganeh also held talks in Tehran with Rafael Ramirez of Venezuela. In a press talk, Zanganeh also indicated that he would talk with Saudi Arabia about market share when Opec meets next week in Vienna.

Venezuela, Ecuador and Libya have all been contributing to the debate by saying that a cut was appropriate. Rafael Ramirez, who was Venezuela’s energy minister until two months ago, has also been visiting Algeria, Iran, Qatar and Russia in recent weeks.

As market players sit down to evaluate their priorities, Russia too has said it’s willing to cooperate with Saudi Arabia on the oil market, while avoiding a commitment to limit output.

In a joint statement issued after a meeting between the Russian Foreign Minister Sergei Lavrov and his Saudi couterpart Prince Saud Al-Faisal in Moscow on Friday, the two agreed to coordinate on “issues” affecting the energy and oil markets.

And to follow up, Rosneft Chief Executive Igor Sechin was to be in Vienna, just two days before the Opec meeting. The surprise announcement raised speculation that Sechin, a close ally of Russian President Vladimir Putin and a former deputy prime minister, would meet Opec ministers there, exploring common ground. Much is definitely at stake.

Published in Dawn, November 23rd, 2014