Saudi Arabia's oil minister has agreed to freeze oil production at January levels, indicating that the Opec leader may be willing to reassess its "lower for longer" policy that has dragged down prices for more than 18 months.
Freezing output at January levels will be “adequate” and the nation still wants to meet the demand of its customers, Saudi oil minister Ali Al-Naimi said in Doha after talks with Russian energy minister Alexander Novak, reported Bloomberg.
Non-Opec producer Russia and Opec members Venezuela and Qatar, who were all present at the meeting, have also vowed to freeze output.
Al-Naimi added that more steps to correct the market could be considered in a few months, according to Reuters, but said other producers, namely Iran, would need to cooperate.
Iran, newly free from sanctions, is planning on ramping up its production levels and was absent from today's meeting.
Venezuela's oil minister, Eulogio Del Pino, said more talks will take place with Iran and Iraq tomorrow.
Before the announcement, the price of Brent crude soared six per cent to a two-week high, on hopes the meeting of oil ministers in Qatar willbring some resolution to the continuing supply glut.
Brent crude for April delivery was up to $35.26 a barrel this morning, but fell again after the news.
The talks in Doha came after more than 18 months of plummeting oil prices, triggered by Saudi Arabia's strategy of keeping production high, which in turn lowered prices, in a hope this would drive out higher-cost producers.
But Saudi's plan has largely been unsuccessful; it has not driven out the competition despite hammering the profits of every oil producer.
While Venezuela has been particularly badly hit, even super-rich Saudi has been feeling the pain. Last year it tapped the bond market for $27bn and it is now mulling an initial public offering of its state-owned oil company Saudi Aramco.