Oman welcomes U.S. invitation to OPEC to discuss oil price decline - newspaper

By Dahlia Nehme

DUBAI (Reuters) - Oman welcomes a U.S. invitation to OPEC members to discuss ways of halting a collapse in oil prices, the country's oil minister said, according to the Omani al-Watan newspaper on Thursday.

Oman is not in the Organization of the Petroleum Exporting Countries, but is a member of the OPEC+ alliance of OPEC and non-OPEC nations that struck an oil output deal that had led to relatively stable oil prices since 2017.

The agreement collapsed last month after Russia refused to support deeper production cuts to support prices hit by the coronavirus outbreak.

In response, OPEC's de facto leader Saudi Arabia slashed its export prices and said it would raise production to maximum capacity.

U.S. President Donald Trump said on Wednesday he had spoken to the leaders of both Saudi Arabia and Russia and believed the two countries would reach a deal to end their price war within a few days.

"The invitation addressed by the United States ... to main OPEC member countries to return to negotiations may rekindle hopes of reaching practical solutions to controlling the oil price decline," Omani oil minister Mohammed bin Hamad al-Rumhy said, according to al-Watan.

"We don't support countries in increasing production at this sensitive stage, as it doesn't serve the global oil industry nor the states' interests."

"The oil market is going through a critical stage and the economical and financial losses, especially for countries dependent on oil revenues, will be large if prices remain where they are now," he added, ruling out the possibility of price drop to about $15 per barrel.

International crude prices <LCOc1> have fallen by around 50% to below $26 a barrel since the OPEC+ output deal collapsed.

Al-Rumhy announced ambitious plans late last year to invest more than $20 billion in downstream operations in the next five years. However, the impact of current economic conditions will put on hold any investments in new fields and projects, he was reported as saying on Thursday.

The sharp drop in oil prices in 2020 will intensify Oman's fiscal and external pressures, leading to a faster deterioration in the government's balance sheet, S&P Global Ratings said in its most recent report.

Oman will face a trade imbalance due to lower oil prices and has limited fiscal space to adjust gradually, according to S&P, as hydrocarbon products comprise about 35% of GDP, 60% of current account receipts, and 75% of fiscal receipts.

(Reporting by Dahlia Nehme; Additional reporting by Maher Chmaytelli; Editing by Jan Harvey and Pravin Char)