Saudis see oil-freeze deal possible in November, not this week

By Nayla Razzouk, Dina Khrennikova on 9/27/2016

ALGIERS (Bloomberg) -- A deal by major oil exporters to freeze output may have to wait another couple of months.

As producing countries gather in Algiers for talks on Wednesday, Saudi Arabia signaled for the first time it may accept the idea that Iran keep output at maximum levels but doesn’t expect an accord to be reached this week. A deal in November is possible, Saudi Oil Minister Khalid Al-Falih said in a briefing in the Algerian capital.

“Saudi Arabia will be a willing partner in this freeze agreement," Falih said. “Three countries have special conditions, namely Libya, Nigeria and Iran.”

Saudi Arabia will suffer a fiscal deficit equal to 13.5% of gross domestic product this year, compared with one of less than 2.5% of GDP for Iran, the International Monetary Fund estimates. The IMF says the Saudis need oil close to $67/bbl to square the books. For Iran, it’s lower, at $61.50. Brent crude, the global benchmark, fell below $46/bbl in London on Tuesday.

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