Qatar’s energy and industry minister said Tuesday that the oil market is slowly recovering from its steep drop but crude is still not trading at a “fair price” to encourage investment.
“The oil market is recovering slowly but steadily. Luckily, the fundamentals show it is heading in the right direction,” Mohammed bin Saleh al-Sada told The Associated Presse.
“I don’t think we are yet at a fair price. We need to have a fairer price so that we can have the ability to invest more in order to secure the energy supply to the world and avoid any price shock,” he said ahead of next week’s meeting of OPEC producers in the Austrian capital.
Speaking from his high-rise office in Doha, al-Sada said a minimum price of $65 a barrel is “badly needed at the moment.”
He cautioned that the security of future supplies is as risk because of the price slump that has squeezed oil producers in the past two years.
The minister did not rule out reviving talks of a freeze in production among major producers after similar negotiations collapsed in Doha last month.
“Nothing actually is canceled but we are reacting to the parameters of the market,” said al-Sada, who currently serves as president of the 13-memeber OPEC.
“If OPEC and non-OPEC major producers think that the revival of it is necessary, it’s all open and on the table all the time.”
The idea for a production freeze grew out of a meeting between Russia and OPEC members Saudi Arabia, Venezuela and Qatar in February as they attempted to stem a slide that at the time had pushed prices to around $30 a barrel from over $100 in the summer of 2014.
Other major producers gathered in Qatar to discuss the proposal last month but failed to agree on a cap after Iran, which is trying to raise its crude exports to pre-sanctions levels, refused to join in.
Iran stressed on Sunday that it has no plans to freeze the level of its oil production and exports.
“Under the present circumstances, the government and the Oil Ministry have not issued any policy or plan to the National Iranian Oil Company (NIOC) towards halting the increase in the production and exports of oil,” Deputy Oil Minister Rokneddin Javadi was quoted as saying.
Javadi, who also heads the state-run NIOC, told Iran’s Mehr news agency that “Iran’s crude oil exports, excluding gas condensates, have reached 2 million barrels per day (bpd),” adding “crude oil export capacity will reach 2.2 million barrels by the middle of summer.”
Despite Iran’s stance, al-Sada said the April meeting in Qatar was productive because it gave producers a chance to discuss “new market fundamentals.”
Even without an output freeze, prices have been clawing their way back, settling Monday above $48 a barrel. That’s still less than half their level less than two years ago.
Qatar and other OPEC member states will gather in Vienna next week to discuss what to do next. It will be the first such gathering where Saudi Arabia is represented by Khaled al-Falih, who was recently named energy minister in a surprise Cabinet reshuffle.
Al-Sada insisted Qatar’s economy remains healthy even at current oil prices and that major infrastructure projects, including preparations for the 2022 World Cup, are on track.
Qatar is able to manage some of the volatility of the energy markets better than other producers because it is also the world’s largest supplier of liquefied natural gas, much of which is sold in long-term contracts and shipped aboard the Gulf nation’s own massive tankers.