Saudi Arabia's King Abdullah confirmed Sunday that the kingdom would boost its output to 9.7 million barrels a day, a hike of some 200,000 barrels a day against current output forecasts by the country, and said it wanted to contribute $1 billion through OPEC's development fund to ease the pain developing economies are feeling from record energy prices.
In a speech that opened a Saudi-hosted summit on oil involving both oil exporters and consumers, King Abdullah said such a move "is based on the history of the kingdom in energy," with output now at its highest in a quarter century at "this critical hour."
The king called on the Ministerial Council of the development fund of the Organization of Petroleum Exporting Countries to consider the approval of a $1 billion program to assist developing nations cope with high oil prices.
He said Saudi Arabia will contribute to finance the program, as well as provide $500 million in soft loans through the Saudi Fund for Development for financing projects, which help developing countries obtain energy and finance.
King Abdullah also called upon the World Bank to organize a meeting as soon as possible for the donor countries and regional and international financial institutions to discuss how to help poor countries cope with high energy costs.
U.K. Prime Minister Gordon Brown, the most senior leader from among oil-consuming nations at the event, welcomed the measures and reiterated the terms of a new deal between producers and consumers, and said it was necessary to study the impact of financial investors on oil markets.
Saudi Arabia and the U.K. have agreed to work together on developing the capture and storage of carbon emissions from power plants, Brown said, and the U.K. is to work with the United Arab Emirates on developing its civil nuclear power program, and with Nigeria and Iraq on boosting their oil security.
Consumer nations must help "incentivize producers," Brown said, as he called for "other consuming countries to follow the U.K.'s lead in offering genuine openness in our investment markets."
Oil prices in New York hit a new record Monday of $139.89 a barrel but have since eased back on a combination of Chinese fuel price hikes and expectations that Saudi Arabia will boost oil supplies.
Following the Jeddah meeting, King Abdullah suggested forming a working group to follow up and implement the recommendations of the meeting.
The participants in a final statement called for more upstream and downstream investment, improved transparency and regulation of financial markets, and increased efforts for energy efficiency.