He made the remarks during a press briefing via telephone.
Hochstein said he doesn`t think anybody should have been surprised by the lack of the ability to reach an agreement during the oil producers` Doha meeting.
The meeting of oil producing countries on output freeze was held in Doha on Apr.17. The representatives of 17 OPEC and non-OPEC countries took part in the event. No agreement was reached during that meeting.
"One of the major producers coming back on-line is Iran," he said, adding that it should have been hardly anybody`s expectation that a country that has been under extreme sanctions would adhere to a cap of production, freezing them at sanctions levels.
"Second, when you have a price reduction in oil that is a result of a glut in oil supply versus demand, freezing production at peak levels is hardly the answer that would result in much more than a psychological signal," he added.
"Demand will rise, instead of capped production by governments, we`re seeing capex reduction by companies that will ultimately lead to less production, balancing the market again, and reaching out to a future that has a more balanced approach and maybe a different price level," said Hochstein.
The oil markets have been volatile since they were, since trading started, said the State Department representative, adding that he doesn`t expect that to change.
OPEC is still an important organism in the oil markets. But so are several other oil producers, namely the US that have not and will not participate in these kinds of artificial interventions, he said.
Oil market to address itself
07 May 2016
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Instead of focusing on coming together with an arbitrary or artificial intervention in the oil market, we should focus on the market addressing itself, says the Special Envoy and Coordinator for International Energy Affairs leading the Bureau of Energy Resources (ENR) at the US Department of State Amos Hochstein.
