SAUDIS ANNOUNCE EMERGENCY OIL MEETING

C O N F I D E N T I A L RIYADH 000918 SIPDIS NEA FOR DAS GGRAY DEPT OF ENERGY PASS TO A/S KKOLEVAR, MWILLIAMSON, GPERSON, AND JHART TREASURY PASS TO A/S CLOWERY CIA PASS TO TCOYNE E.O. 12958: DECL: 06/10/2018 TAGS: EPET ENERG SA SUBJECT: SAUDIS ANNOUNCE EMERGENCY OIL MEETING Classified By: DCM Michael Gfoeller for reasons 1.4 (b) (c) and (d). ¶1. (U) This is an action request. DOE/International Policy and EB/ESC/IEC please see paragraph five. ¶2. (C) In the wake of oil prices reaching $139/barrel on June 6, press news broke on 9 June that the Saudi government plans to call an emergency meeting to discuss the current crude oil pricing situation. The Saudi cabinet took the decision in their weekly June 9 meeting. In a conversation on 10 June, Ministry of Petroleum (MinPet) Public Relations Head Dr. Ibrahim Al Muhanna indicated MinPet hoped set the meeting date for about two weeks hence, maybe a bit later, but would finalize a date soon. The SAG will host the meeting in Riyadh, in coordination with the International Energy Agency (IEA) and the International Energy Forum (IEF). Major producing and consuming countries, and key international and national oil companies will be invited. Minister Naimi is the expected host; it is unclear if King Abdullah will attend. ¶3. (C) Dr. Al Muhanna inquired anxiously if the USG intended to be represented at the meeting. Energy Attache noted the short time line, and promised to request guidance from Washington. ¶4. (C) A well-placed industry source in Riyadh indicated that Assistant Minister of Petroleum Prince Abdulaziz bin Salman bin Abdulaziz Al-Saud had called him, quite agitated, to request his "full support" for the meeting. The source noted that Prince Abdulaziz appeared to be in a relatively reluctant frame of mind to support the meeting, but "owed it to his King" to do so. ¶5. (C) Comment and Action Request: Recognizing that we have not yet received a formal invitation to the proposed meeting, and many details about the agenda remain unclear, Mission requests that DOE/International Policy and EB/ESC/IEC send us talking points and/or instructions regarding the USG view on the proposed meeting to present to MinPet. MinPet is looking for strong international support to host this meeting - whether at their own initiative or at the behest of their highers-up. The little we know so far suggests that this is a Royal initiative. Further, there appears to have been a significant softening in the tone of the Saudi press statements overnight, which may suggest intervention by King Abdullah or the cabinet. The initial Reuter's announcement of the meeting was accompanied by Petroleum Minister Naimi's typical statement that the market was well-supplied, and no new production decisions would be made at the proposed meeting. However, by this morning, Petroleum Minister Naimi was no longer speaking for the Saudi government. Instead, he had been replaced by Information and Culture Minister Madani, who emphasized that the Kingdom was ready to provide all oil companies and countries that it deals with any additional oil they need. In the wake of the G8 meeting, and Friday's $11 jump in crude prices, the Kingdom's leadership appears to have realized that crude prices have metastasized into a political issue potentially devastating for the Saudis' image and interests. King Abdullah and the cabinet evidently now view resolving this as a political issue instead of a technical matter. FRAKER