Saudi Arabia can wait out low oil prices, says chairman of Aramco

Khalid al-Falih told delegates that the current low price of oil is "irrational" and will not last, rising by the end of 2016, according to comments carried by the Financial Times.

"The market has overshot on the low side and it is inevitable that it will start turning up," he said, according to the newspaper.

While the outlook is "bleak" in the short term, al-Falih said that Saudi Arabia is better placed than other countries to survive the downturn, the Financial Times said.

"If prices stay low we will be able to withstand [it] for a long time," al-Falih said, according to the newspaper. "Obviously we don’t hope for it."

Saudi Arabia is the world's second biggest oil producer and the top crude exporter. "This is the position that we've earned ... we are not going to leave that position to others," al-Falih said, according to CNN Money.

"Saudi Arabia has never advocated that it would take the sole role of balancing market against structural imbalance," al-Falih said during a CNN panel, the report said.

"If there are short term adjustments that need to be made and if other producers are willing to collaborate, Saudi Arabia will also be willing to collaborate," he said.

The International Energy Agency warned this week that the world oil market could 'drown in oversupply', keeping prices low, as oil from Iran comes on stream.

The market could see a third successive year when supply will exceed demand by 1 million barrels per day and there will be "enormous strain on the ability of the oil system to absorb it efficiently", it said.

In a recent report, the Saudi Arabian National Commercial Bank (NCB) said that oil oversupply will continue and will keep oil prices at an average of $50 a barrel in 2016. OPEC members have continued to produce over the 30m bpd quota for the 18th month in a row, it said.

Saudi Arabia's oil production peaked at 10.6m bpd in June 2015, while Iraq has increased output over the year by around 700,000 barrels, reaching 4.2m bpd in November last year, the NCB said. The lifting of sanctions on Iran "is expected to bring an additional 600 thousand barrels a day", meaning OPEC countries together are likely to continue producing more than 32m bpd, it said.