Saudi Arabia to join oil output freeze only if Iran joins
April 01 2016 02:13 PM
Saudi deputy crown prince
Saudi Arabia's Deputy Crown Prince Mohammed bin Salman

Reuters/London

* Riyadh can withstand low oil prices - deputy crown prince

* Oil prices fall on scepticism over any deal

Saudi Arabia will agree to freeze crude oil production levels only if Iran and other major producers do so, the kingdom's deputy crown prince said in an interview with Bloomberg.

Iran has said it will not join fellow Opec and non-Opec members in a plan to be discussed in a Doha conference on April 17 to freeze oil production in an attempt to boost prices.

Iran wants to revive its oil industry following the lifting of international sanctions as part of an international deal over Tehran's nuclear programme.

"If all countries including Iran, Russia, Venezuela, Opec countries and all main producers decide to freeze production, we will be among them," Mohammed bin Salman said.

The comment by the 30-year-old prince is likely to dampen hopes for a deal. Benchmark Brent crude fell below $40 per barrel on Friday, with the market growing increasingly sceptical about the success of any deal.

Top Opec producer Saudi Arabia and Russia, which is not a member of Opec, agreed in February to freeze output levels, but said at the time the deal was contingent on other producers joining in.

Qatar has said around 15 members of the Organisation of the Petroleum Exporting Countries and non-Opec producers, accounting for about 73% of global oil output, are supporting the initiative.

Bin Salman nevertheless said Saudi Arabia was ready to face a prolonged period of low oil prices that have dropped sharply since mid-2014 as a result of higher global production.

"I don't believe that the decline in oil prices poses a threat to us," he said.

Iran is expected to add half a million barrels of oil supply a day within a year from its existing oilfields after the lifting of sanctions, but developing new fields would take time, the head of the International Energy Agency said on Wednesday.

The crown prince also outlined plans to create a sovereign fund which will eventually control $2tn in assets and help wean the kingdom off oil. It will include selling up to 5% in shares in Saudi's national oil company Aramco.

"IPOing Aramco and transferring its shares to PIF (public investment fund) will technically make investments the source of Saudi government revenue, not oil," the prince said.

The share placement could happen as early as next year, he said.



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