In a sign of tentative cooperation among major oil producers, Qatar, Russia, Saudi Arabia and Venezuela announced a plan Tuesday to freeze output at current levels, a move intended to help bolster energy prices.
The plan, although hardly concrete, reflects the troubled state of the oil industry.
With prices having recently slipped to new lows, major oil producers, particularly in the Organization of the Petroleum Exporting Countries, are trying to calm the markets with talk of a deal. But the proposal gives countries a potential out, a big reason oil prices gave up their initial gains on Tuesday. On the day, crude fell 1.4 percent.
Although speculation focused for months on production cuts, the talk now centers on holding production steady. Even that would be helpful in a market where countries have been steadily ramping up production to record levels.
Never miss a local story.
The plan represents a reversal for Saudi Arabia. As oil prices have slumped, the country, the de facto leader of OPEC, has avoided trying to manage the market through cuts, or even talking of them. Instead, it has continued to ramp up production, even as prices dropped sharply.
It is also symbolic that Saudi Arabia and Russia are now presenting a united front on oil. The two countries are geopolitical rivals, backing opposite sides in the Syrian civil war.
Although major oil-producing countries have been floating ideas to the markets for months, the rhetoric is heating up as oil prices flirt with $30 a barrel.
Venezuela has been especially vocal about managing production. The country’s economy, which is critically linked to the prices of oil, is in disarray, and its leadership has little financial backup.
Now it appears to be getting support from Saudi Arabia and Russia. Although such big players are feeling the pain, they are in better shape, making it easier to weather the price weakness.