Baku, Azerbaijan, Sept. 23
By Aygun Badalova – Trend
Ongoing tensions with Iran, as well as lack of commitment from other oil producers, mean that Saudi officials will be hesitant to sign up to a deal to freeze oil output, analysts of the British economic research and consulting company Capital Economics believe.
“There have been signs in recent weeks that the sharp slowdown in the Saudi economy caused by fiscal austerity may have prompted the authorities to look at alternative solutions to deal with the collapse in oil prices,” analysts said in the report, obtained by Trend.
In particular, they mentioned, officials have softened their opposition to a deal to freeze oil output to boost oil prices, while a forthcoming bumper international bond issuance suggests that the appetite for further fiscal consolidation may be waning.
But even though austerity seems to be pushing the economy towards recession, we expect policymakers to continue along this path, the analysts said.
The informal OPEC meeting is expected in late September in Algiers. It is expected that the talks on oil production freeze will be held between OPEC and non-OPEC countries.
The meeting will be held at the fringe of the International Energy Forum in Algiers from 26-28 September.
Saudi Arabia is the largest OPEC oil producer and exporter. The Kingdom produced 10.605 million barrels per day of oil in August compared to 10.577 million barrels per day in July, according to OPEC’s latest estimates.