Decisions by OPEC+ are not politicised and are based on market fundamentals, Saudi Arabian Energy Minister Prince Abdulaziz bin Salman said on Monday, adding that the alliance of oil producers is sufficiently flexible to adjust policy as needed.
Prince Abdulaziz was speaking at a media forum in Riyadh about last October’s decision to cut the group’s production target by two million barrels per day.
The group comprising the Organisation of the Petroleum Exporting Countries (OPEC) and allies including Russia agreed the cuts until the end of 2023.
Prince Abdulaziz reiterated in an interview with Energy Aspects last week that the decision was locked in for the rest of the year, adding he remained cautious on Chinese demand forecasts.
“The agreement that we struck in October is here to stay for the rest of the year. Period,” he said.
In the interview, the minister said the oil group can’t increase output based solely on initial signals.
“No matter what trends you are looking at, if you follow the cautious approach not only would you see the beginning of a positive trend to emerge but you need to make sure that these positive signals of this market can be sustained,” he said.
“The Chinese economy’s unlocking and because of that you will have demand and what have you, but we all went through cycles of openings and lockdowns and therefore what assurances (would we have) and the world have that none of what we went through, all of us, every country, will not be repeated?”
Prince Abdulaziz also said it was still unclear how much longer global monetary and fiscal tightening would continue.
“The jury is still out on how much more inflation may come and how the central bankers will react to it given their mandate,” he said.
The prince blamed the Paris-based International Energy Agency (IEA) and its initial predictions for a three million barrel per day (bpd) fall in Russian production for the US strategic petroleum reserve (SPR) releases last year.
“That is a decision that is not mine, I respect the decision,” he said.
Published in The Express Tribune, February 21st, 2023.
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