Saudi Arabia’s oil minister said on Tuesday that a cooperative production cut plan is unlikely to materialize as OPEC members and non-OPEC producers continue to discuss possible output freezes.
During his address at the IHS CERAweek conference, Saudi oil minister Ali bin Ibrahim al-Naimi said there is no point in seeking production cuts because they “will not happen,” according to the New York Times.
“There is no sense wasting our time seeking production cuts. That will not happen,” al-Naimi said at the conference.
The oil minister’s comments comes just one week after Saudi Arabia, Russia, Qatar and Venezuela agreed to freeze production at January levels.
While news of the deal helped prop up crude prices a freeze is expected to have little impact on swelling global crude inventories.
Saudi Arabia has been consistently pumping over 10 million barrels per day since last year while Russian production, also at a record high, is already expected to stall as the country’s fields mature.
Although a number of new projects are being developed in Russia, those projects are only expected to offset declining production from maturing fields and not result in any significant near term output growth, according to the U.S. Energy Information Administration.
Any production deal will also be complicated by Iran’s plans to boost its crude production by as many as 500,000 barrels per day in the near term.
Iranian Oil Minister Bijan Zanganeh told the ISNA news agency on Tuesday that he considers the deal a “joke.”
“Some neighboring countries have increased their production over the years to 10 million barrels per day and export this amount, then say let’s all freeze our oil production,” Bijan Zanganeh told the ISNA.
According to data provided by OPEC, Iran currently produces about 3.11 million barrels of crude per day.
The International Energy Agency said earlier this month that even if OPEC production remains flat it still expects an implied stock build of 2 million bpd in the first quarter of 2016 and a 1.5 million barrel per day build in the second quarter of 2016.