Russia/Saudi Price Stability Talks Developing In "Tangible" Way: Energy Minister

Alexander Novak says his nation is ready to implement joint measures that will improve the global market.

Russia says it is ready to initiate joint measures with Saudi Arabia that will achieve oil market stability as soon as next year, according to that country's energy minister.

Alexander Novak made the announcement on the heels of a dialogue with the Saudis that he describes as "tangible" and following comments from Khalid al-Falih, energy minister for the kingdom, who said his country will work with Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC members to improve the state of the global market.

In an interview with the Saudi-owned Asharq al-Awsat newspaper, Novak remarked that, "the dialogue between our two countries is developing in a tangible way, whether in the framework of a multi-party structure or on a bilateral level.

"We are cooperating in the framework of consultations regarding the oil market with OPEC countries and producers from outside the organization, and are determined to continue dialogue to achieve market stability."

Novak added that, "We are ready to achieve the widest possible level of coordination... and put in place joint measures to achieve oil market stability, with the condition that these measures will not be for a limited period of time."

OPEC members will meet on the sidelines of the International Energy Forum in Algeria from September 26 to 28 to discuss strategies that could boost oil prices, however, Novak made it clear to Asharq al-Awsat that no stability is possible until 2017.

Furthermore, a diplomatic source told Bloomberg that Russia doesn't predict the meeting will result in an output freeze – which most critics say would be pointless with regards to the huge current crude supply volumes, but causes more speculation as to exactly what potential strategies the Russia/Saudi talks have been formulating.

Stoking this speculation even further is the fact that while Saudi officials have publicly stated their willingness to participate in stabilization talks, "the pre-eminent thing [for them] is about maintaining market share," said Dan Yergin, vice chairman of HIS Markit, last week while expressing his concern about how another OPEC talkfest could possibly result in an agreement between rival members.