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Saudi Arabia’s energy minister has defended the kingdom’s decision to extend oil production cuts, insisting the move was not intended to “raise prices” even as crude futures approach $100 a barrel.
Riyadh and Moscow announced earlier this month that they would extend production and export cuts until the end of the year. Brent crude, the international oil benchmark, has since risen more than 5% and rose another 1% on Monday to nearly $95 a barrel, a 2023 high.
“It is not about… Energy Minister Prince Abdulaziz bin Salman said on Monday in his first public comments since the decision:
He insisted it was uncertain whether a global economic recovery would drive a surge in oil demand.
“The jury is still out on how growth in Europe will pan out,” he told industry leaders gathered at the World Petroleum Congress in Calgary, Canada. “The jury is still out on how central bankers will raise interest rates . . . The jury is still out on how the U.S. economy will fare in the context of what’s happening globally.”
Many analysts expect oil prices to continue rising as production cuts limit supply at a time when global demand is accelerating. Mike Wirth, chief executive of U.S. energy giant Chevron, on Monday became the latest high-profile figure to predict that oil prices will soon top $100 a barrel.
The International Energy Agency predicts that global oil consumption will average 101.8 million barrels per day this year, setting a new record, driven by surging demand from China, while production cuts by Saudi Arabia and Russia will leave the global oil market with a “significant deficit.” The rest of the year.
Prince Abdulaziz, the half-brother of Saudi Crown Prince Mohammed bin Salman, also lashed out at the IEA, escalating a war of words with the agency that he said should Some critics of the OPEC+ cartel were “ashamed” of the supply cuts led by Saudi Arabia and Russia.
“The things they warned about – and maybe any time they predicted – were less accurate than people hoped,” he added. “They have now moved from market forecasters and evaluators to political advocates.”
He said the kingdom could adjust the cuts if needed but “we should be cautious about these things”.
“We don’t want to see what we see today because things are not bad,” the minister said.
Rising prices are adding to pressure on U.S. President Joe Biden to seek re-election next year. Washington has been reluctant to publicly criticize Riyadh’s cuts as it seeks a deal to “normalize” relations between Saudi Arabia and Israel.
Bin Salman’s comments come within a week of a high-level delegation from the kingdom visiting New York for the United Nations General Assembly.
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