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Oil freeze agreed by Saudi Arabia and Russia

Saudi Arabia and Russia will freeze oil production to reduce the growing oversupply in the market and allow prices to recover, but the deal is dependent on other producers joining the agreement, Reuters has reported. 18 Feb 2016

Saudi, Russian, Qatari and Venezuelan oil ministers said that production will be frozen at January 2016 levels, Reuters said.

Although this is near to a record high in production, Saudi oil minister Ali Al-Naimi said the four ministers feel it is an adequate level and hope other producers will join the plan, according to Reuters.

This is "the beginning of a process which we will assess in the next few months and decide if we need other steps to stabilise and improve the market," Al-Naimi told reporters, Reuters said.

"We don't want significant gyrations in prices, we don't want reduction in supply, we want to meet demand, we want a stable oil price. We have to take a step at a time," he said, according to the news agency

Venezuela's oil minister Eulogio Del Pino said talks will take place with Iran and Iraq later this week, while Qatar's minister Mohammed al-Sada said: "We think other producers need to freeze straight away including Iran and Iraq. We believe this step is meant to stabilise the market," Reuters reported.

Now that sanctions have been removed, Iran has said that it will boost its output by an immediate 500,000 bpd, the International Energy Agency (IEA) said last month. This could lead to the market "drown[ing] in oversupply" this year, keeping prices low.

The agreement was reached at an unannounced meeting in Doha, Reuters said.