HOUSTON — Saudi Arabia’s petroleum minister on Tuesday ruled out the possibility that a recently announced oil production freeze by several countries might lead to cuts to reverse the plunge in oil prices.
“There is no sense wasting our time seeking production cuts,” Ali bin Ibrahim al-Naimi told energy executives at the annual IHS Ceraweek conference. “That will not happen.”
Mr. al-Naimi’s comments put further pressure on oil prices. The price of West Texas intermediate crude oil, the United States benchmark, turned sharply lower after his remarks and settled at $31.87, down 4.5 percent.
Mr. al-Naimi is widely considered the most influential voice in energy policy in Saudi Arabia, which dominates the Organization of the Petroleum Exporting States, so his words are followed closely and typically move both energy and equity markets.
In recent days, there had been the prospect that a recent announcement by Saudi Arabia, Russia, Venezuela and Qatar to cap production at January levels might herald new coordination among producing countries.
Saudi Arabia, Russia and Qatar, along with Iraq, have been raising production to compete for Asian markets ever since refused in late 2014 to cut production. Their growing output has created excess production of between one million and two million barrels a day above global demand, leading to near record inventories around the world.
Saudi Arabia has consistently said it will not curb production when other producing countries refuse to. With Iran preparing to add 500,000 barrels a day to global supplies now that nuclear sanctions have been lifted, the Saudi position has only hardened.
Mr. al-Naimi said that Saudi Arabia hoped that producing countries would get together in March to unite producers and expand the freeze.
“If we can get all of the major producers to agree not to add additional barrels, then this high inventory we have now will probably decline in due time,” he said. He added that that was the best that could be hoped for because countries are not likely to abide by any public promises to ease production.
“Even if they say they will cut production, they will not deliver,” Mr. al-Naimi said.
If oil executives held out hope that Mr. al-Naimi might announce an unexpected Saudi policy change, they were disappointed.
“I don’t think you can count on the freeze working,” Ryan Lance, Conoco Phillips’s chairman, told fellow executives following Mr. al-Naimi’s remarks. “We have to plan for a worst case. We have to see inventories start to flatten.”
The freeze announcement last week helped firm up oil prices for a few days because it signified that Saudi Arabia and Russia, the two biggest exporters, were at least talking despite their opposing political positions in Syria and elsewhere.
But analysts have expressed skepticism that either Russia or Saudi Arabia are even capable of producing more than they are today so that the freeze was at record levels that will not reduce the glut. Russian production is already beginning to decline, because of a lack of sufficient investment to replace output lost from aging fields.
“If Russia wants to freeze production at January levels it needs to increase production,” Fatih Birol, executive director of the Paris-based International Energy Agency, told reporters on Monday.