Saudi Arabia’s Energy Minister has defended his country’s decision to extend the oil production cut, insisting that the move is not about “inflating prices”, even though crude futures are pushing towards $100 per barrel.
Riyadh announced earlier this month that it would extend production reductions and exports until the end of the calendar year. Brent crude, an international benchmark for oil, has increased by more than 5% since then. On Monday, it rose another 1% to almost $95 per barrel, which is a new record high in 2023.
“It is not about” . . In his first public remarks since the decision, Prince Abdulaziz bin Salman (the energy minister) said that it was not about jacking prices up, but rather making the right decisions when we have all the information.
He said that a global economic rebound, which has fueled a surge of oil demands was not certain.
He told the World Petroleum Congress, held in Calgary, Canada that “the jury is still out” on what Europe’s growth will look like. “The jury is still out on what central bankers will do regarding additional interest rates.” . . “The jury is still out on how the US economy’s performance will be in the context of global events.”
Analysts expect oil prices to continue rising as production cuts are limiting supply in a period of increasing global demand. Mike Wirth became the latest prominent figure to predict on Monday that oil prices would soon surpass $100 per barrel.
The International Energy Agency (IEA) expects that global oil consumption will average a new record 101.8mn barrels per day this year. This is due to a surge in Chinese oil demand.
Prince Abdulaziz is the half-brother to Saudi Crown Prince Mohammed bin Salman. He also attacked the IEA and escalated a verbal war with it, saying that the agency should be ashamed of some of the previous comments made criticizing the Opec+ cartel, led by Saudi Arabia, over the reductions in the supply.
He added that “none of what they warned about – and perhaps any forecasts that they made – were as accurate as we would have hoped.” “They are no longer a market assessor and forecaster, but instead, they have become advocates for political causes.”
He said the king could adjust the cuts if necessary, but “we should be careful about these things”.
The minister stated that “it is not our desire to see the current situation because it is still not bad.”
As US President Joe Biden seeks to be re-elected next year, rising prices have put more pressure on him. Washington has resisted criticising Riyadh publicly over the price cuts, as it seeks to “normalise’ relations between Saudi Arabian and Israel.
Bin Salman made his comments during a visit to New York by a delegation of high-level officials from the Kingdom for the UN General Assembly.