Saudi Arabia and Russia agree oil output freeze

Saudi Arabia, Russia, Qatar and Venezuela have agreed to freeze oil output at January levels as a first step in efforts to support oil prices that have fallen about 70% from their peak, damaging economies and causing chaos in financial markets.

The freeze is conditional on other producers agreeing to take part, Russia’s Energy Ministry said in a statement.

Saudi Oil Minister Ali Al-Naimi said the deal to freeze production at January levels is the beginning of a process that could require “other steps to stabilize and improve the market.”

The deal is preliminary and does not include Iran — but it is the first significant piece of cooperation between OPEC and non-OPEC producers in 15 years.

Saudi Arabia, Qatar and Venezuela are OPEC members.

“We don’t want significant gyrations in prices. We don’t want a reduction in supply. We want to meet demand. We want a stable oil price,” said Naimi.

Eugen Weinberg, head of commodities research at Commerzbank AG in Frankfurt, told Bloomberg News: “This is an announcement of a production freeze among countries whose production didn’t even grow recently.

“If Iran and Iraq are not a part of the agreement, it’s not worth much — and even then there is still a question of compliance.”