Saudi Arabia’s Energy Minister Abdulaziz said production cuts by the Organization of the Petroleum Exporting Countries (OPEC) and non-member oil producing countries “OPEC+” could “definitely” continue beyond March next year if necessary. Stated. He also said the production cuts would be fully implemented.
The energy minister said supply cuts of more than 2 million barrels per day announced last week would only be reversed in a “phased approach”, taking into account market conditions. Roughly half of these supply cuts will be carried out by Saudi Arabia.
While Abdulaziz was speaking to Bloomberg, oil prices were below their pre-OPEC+ meeting levels, trading around $78 a barrel in London. Oil prices have not regained their upward momentum, with market participants pointing out that only about half of the cuts are new cuts and questioning whether all of the promised supply cuts will be realized.
Abdulaziz said such skeptics would be proven wrong.
In an interview in Riyadh on the 4th, he said, “I strongly believe that a production cut of 2.2 million barrels per day will be realized.” “Honestly, we think we can cut production by 2.2 million barrels even with inventory buildup in the first quarter as usual. There are already signs that demand is improving.”
As traders try to figure out the true impact of the OPEC+ deal, the big question is Russia. Russia’s contribution comes from export curbs, not complete production cuts like other member countries.
Abdulaziz said he wanted to cut production but was unable to convince the Russian side. The Russian government has long argued that frigid weather and other geological conditions make it difficult to curb production in the first months of the year.
“We also recognize that it will be very difficult for Russia to reduce production in the winter,” he said.
He emphasized the trust between Saudi Arabia and Russia, even though the kingdom has made the biggest production cuts of any member country and is making the biggest effort to rebalance the oil market.
He said he has the same confidence in the United Arab Emirates (UAE). The country has been asking for years to be allowed to expand production in order to monetize its investment in vast production capacity.
Asked about the UAE’s commitment to the OPEC+ deal, Abdulaziz said: “If we had thought that the UAE would not do what it has to do, we would not have had this deal.”
Original title:OPEC+ Cuts Can ‘Absolutely’ Stay Past March, Saudi Minister Says(excerpt)
(Add and update the second and subsequent paragraphs)
2023-12-04 16:43:00
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