From Energy Intelligence, March 14:
Uncertainty in the global economy is limiting “clarity” about the outlook for oil markets and means the “sensible and only course of action” for Opec-plus is to stick to the production pact agreed last October, Saudi Energy Minister Prince Abdulaziz bin Salman said in an interview with Energy Intelligence this week.
The minister also commented on market interventions by consumer nations such as the G7 price cap on Russian oil and the proposed Nopec bill in the US, and on tight global oil production capacity.
The full text of the interview follows:
Q: Opec-plus decided in October to reduce production by 2 million barrels per day until the end of 2023. Given the current macroeconomic and oil market developments, in your view, would it be possible for Opec-plus to reverse course and increase production?
A: There are many factors influencing market sentiment. The global economy is forecasted to continue growing this year and next year, but there is still uncertainty around the pace of growth. Moreover, China has just started to rebound after extended Covid lockdowns, but the duration for recovery is still unclear. Economic recovery is generating inflationary pressures, and this could prompt central banks to intensify their efforts to tame inflation.
The interplay of these and other factors limits clarity, and the sensible and only course of action in such an uncertain environment is to maintain the agreement we struck last October for the rest of this year and that is what we intend to do. We need to ascertain that the positive indicators are sustainable.
There are those who continue to think that we would adjust the agreement before the end of year. For those I say they need to wait until Friday, Dec. 29, 2023 to demonstrate to them our commitment to the current agreement.
Q: What are your views on the US Congress reintroducing the Nopec bill, as well as the G7 price cap on Russian oil, and the potential implications for the oil market? Do you think price caps could be applied beyond their existing scope?
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