Oil prices dropped after Saudi Arabia, the largest exporter in the world, ruled out production cuts and industry data showed a higher accumulation in the crude oil inventories of the United States.
Alí Al-Naimi, oil minister of Saudi Arabia, announced that his country will not reduce oil production and said that the market should adapt to their low prices from now on.
“Reducing low-cost production, such as that of Saudi Arabia, in order to subsidize more expensive supplies would only delay an inevitable adjustment in prices,” said Al-Naimi during the IHS CERAWeek international energy conference, held annually in Houston, Texas.
The proposal of Rusia and Saudi Arabia, also joined by Venezuela and Qatar, to freeze production at the levels they had las January, was described as “ridiculous” by the government of Iran.
Iran, the country with the fourth largest oil reserves in the world, has re-entered the world market after the sanctions against it, imposed over its disputed nuclear program, were lifted after reaching an agreement with the international community.
Meanwhile, the American Petroleum Institute of the United States announced an increase of 7.1 million barrels in the U.S. crude oil stocks for the week which ended on Feb. 19.