Saudi Arabia’s oil minister said Tuesday that production cuts to boost oil prices won’t work, and that instead the market should be allowed to work even if that forces some operators out of business.Ali Al-Naimi said production cuts by big, low-cost producers like Saudi Arabia would amount to subsidizing higher-cost ones — an apparent reference to U.S. shale oil drillers.Booming U.S. production effectively ended oil trades at more than $100 per barrel that were taking place less than two years ago. A barrel of U.S. crude is now hovering around $30, a price at which many shale operators are assumed to be losing money.”The producers of these high-cost barrels must find a way to lower their costs, borrow cash or liquidate,” Naimi said. “It sounds harsh, and unfortunately it is, but it is the more efficient way to rebalance markets.”Naimi disputed a common view in the industry: that Saudi Arabia has kept pumping oil to protect its market share and undercut shale producers. “We have not declared war on shale or on production from any given country or company,” he said.
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