S Arabia, US held secret oil talks

A report reveals that the United States and Saudi Arabia held secret talks to discuss a deal prior to a June meeting of the Organization of the Petroleum Exporting Countries (OPEC).

The American and Saudi officials discussed a fuel swap that was supposed to severely reduce the price of crude oil in the global market ahead of the OPEC ministerial meeting that was held in the Austrian capital of Vienna, Reuters Africa reported on Wednesday.

The plan would have seen the world’s largest oil exporter swap its low-quality heavy oil with high-quality crude oil stored in US emergency reserves.

High-quality “sweet” US crude oil would have been shipped to European refiners that are battling a severe shortage of supplies since the war in Libya cut off shipments of premium crude oil.

The Saudis would in return sell their heavier “sour” to the United States at a discounted rate to replace their emergency stocks.

The deal never finalized as the Saudis were not willing to subsidize crude oil sales to their European and US customers.

At the Vienna OPEC meeting, Saudi Arabia, backed by Kuwait, Qatar and the United Arab Emirates, offered to increase oil production by 1.5 million barrels a day to 30.3 million barrels in a bid to reduce global oil prices.

The member states failed to reach an agreement on the output level, however, as six members opposed the Saudi-led push to increase OPEC’s output.