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Ecuadorian president says reasons for low oil prices are geopolitical

September 25, 2016, 3:40 UTC+3 RIO DE JANEIRO

"In the medium term and in the long term, low (oil) prices harm us all," Rafael Correa said

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Ecuadorian President Rafael Correa

Ecuadorian President Rafael Correa

© ITAR-TASS/Mikhail Metzel/Archive

RIO DE JANEIRO, September 25. /TASS/. Low oil prices are due to geopolitical, not economic reasons, Ecuadorian President Rafael Correa said on Sunday.

"This is not an economic but rather a geopolitical problem — a conflict between Saudi Arabia and Iran," Correa said at the weekly session of reporting on government’s work. The president noted that Saudi Arabia seized Iran’s share on the oil market, which Tehran had lost earlier due to sanctions, and Riyadh "does not want to give it back."

"Moreover, though low prices are harmful to Saudi Arabia, they are also harmful to Iran, Russia and Venezuela. And as you know, Saudi Arabia is a close ally of the United States," he stressed.

Correa expressed hope that the member countries of OPEC (Organization of the Petroleum Exporting Countries) will reach an agreement on stabilizing the oil market at the informal meeting that may take place in Algeria next week. "Otherwise, consequences may be very serious. The OPEC itself may collapse," he added.

"In the medium term and in the long term, low (oil) prices harm us all. Because of the cheap oil, there are no investments in the development of new technologies," the Ecuadorian president said.

On September 26-28, the International Energy Forum will be held in Algiers. In the framework of the forum, main oil exporting countries are expected to hold talks on freezing oil production. Among initiators of the discussion are Venezuela, Ecuador and Kuwait. The ministers of Saudi Arabia, Iraq and Iran also confirmed their participation in the talks.

Russian Energy Minister Alexander Novak told TASS earlier this week that Russia is ready to discuss coordination on oil markets at the informal meeting of oil exporting countries in Algiers.

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