The oil market remains well-supplied, with the recent price rise driven by geopolitics, not fundamentals, the Saudi and UAE energy ministers said Thursday.
Even so, the ministers maintained "their commitment to security of supply" and said they will continue to monitor market conditions, the Saudi energy ministry said in a statement.
Saudi energy minister Khalid al-Falih and UAE counterpart Suhail al-Mazrouei discussed the state of the oil market in a phone call Thursday, according to the statement.
"The two ministers voiced their concerns about recent market volatility, fueled by anxiety over geopolitical events despite the availability of ample supply," the statement said.
"They agreed to continue their consultations and to closely monitor the oil market and vowed to work together and with other producers within established mechanisms, as well as with major consumers to ensure market stability," it added.
The two ministers are scheduled to be in Russia next week for the St. Petersburg International Economic Forum, and the statement said they would meet on the sidelines of the event with Russian energy minister Alexander Novak.
OPEC and 10 non-OPEC producers, led by Russia, are in the midst of a 1.8 million b/d supply cut deal that runs through the end of 2018.
OPEC will meet June 22 in Vienna, where the deal will be discussed, amid speculation that the producer group may have to increase its output to make up for any Iranian barrels that are shut-in due to the US' decision to reimpose sanctions. The sanctions, which target Iran's oil exports, go into effect November 5.
OPEC member Venezuela, whose production is already in decline, also faces the prospect of additional US sanctions.
ICE July Brent traded Thursday as high as $80.50/b, the first time prompt-month Brent has been above $80/b since November 2014.
INDIA'S PRICE CONCERNS
Earlier Thursday, the Indian oil minister Dharmendra Pradhan tweeted that Falih had assured him Saudi Arabia "along with other producers will ensure availability of adequate supplies to offset any potential shortfalls and ensure that prices remain reasonable."
Pradhan said he had had detailed telephone discussions with Falih expressing India's "concern about rising prices of crude oil & its negative impact" on the Indian economy.
Rising prices are starting to threaten oil demand in Asia, especially in a country like India, which is starting to feel a pinch more than others,
The fear of high oil prices in India, which imports almost 80% of its crude requirements, comes at a time when demand is showing signs of taking off, after a year of faltering growth.
Analysts have said that a $10/b rise in prices can have a substantial impact on the fiscal deficit.
