- The energy minister reaffirmed that it will be careful about increasing oil production.
- Analysts predict that increased demand will cause prices to rise soon.
- Alliance’s market-monitoring committee advised maintaining oil output at current levels.
Saudi Arabia‘s energy minister reaffirmed that the country will be careful about increasing oil production, despite the fact that numerous prominent analysts predict that increased demand will cause prices to rise soon.
“I will believe it when I see it and then take action,” Prince Abdulaziz bin Salman said in Riyadh.
The minister told energy historian Daniel Yergin that OPEC+’s agreement to limit output by two million barrels per day in October had proven justified. The move sparked outrage in the United States, which claimed that the world economy needs more crude supplies, however, tensions have since subsided.
“If people had trusted us then, we wouldn’t have undergone the trepidations that happened,” he said, referring to a spike in prices to almost $100 a barrel after OPEC+ – a 23-nation group led by Saudi Arabia and Russia – announced its move.
The alliance’s market-monitoring committee convened on Wednesday and advised maintaining oil output at current levels, despite uncertainties over the depth of China’s economic recovery and the volume of Russian shipments as Western nations impose sanctions on Moscow.
Following Russia’s invasion of Ukraine last February, Brent rose to around $130 per barrel. It has since fallen below $80 per barrel, owing to rising interest rates and a strong dollar, which has caused an economic slowdown.
Fear of sanctions
Nonetheless, the oil market remains constrained. According to Goldman Sachs Group Inc., Brent will rise again above $100 per barrel in the third quarter due to low stocks and spare capacity among producers. Morgan Stanley has made a similar prediction.
The prince warned that restrictions against energy companies could backfire if and when demand increases rapidly.
“All of these sanctions and embargoes will converge into one and only thing: a scarcity of energy supplies of all types when they’re most needed,” he warned. “That is my concern.”
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