RIYADH, Saudi Arabia (AFP) — The United States and Gulf oil producers will work together to lessen the impact of low oil prices, President Barack Obama said in Riyadh on Thursday.

They “will launch a new high-level economic dialogue with a focus on adjusting to lower oil prices, increasing our economic ties and supporting GCC reforms”, he said at the close of a Gulf Cooperation Council summit.

Saudi Arabia, the world’s biggest oil exporter, and its petroleum-rich neighbours have been forced to cut subsidies and adopt other measures to deal with deficits caused by plunging oil prices, which make up the bulk of their revenues.

Oil prices have collapsed from more than $100 a barrel in early 2014 to around $40 this month, in part because Saudi Arabia refuses to cut production as it struggles to keep its market share alongside American shale oil producers.

Obama said underpinning the new GCC-US economic dialogue is the need for “an economy that serves all its citizens and respects universal human rights”.

He said the process would support the Gulf monarchies “as they work to provide jobs and opportunities to their young people and all of their citizens.”