Saudi Arabia indicates readiness to supply more oil if energy situation deteriorates

Saudi Arabia's Energy Minister Prince Abdulaziz bin Salman has indicated readiness to supply more oil if the global energy crisis deepens. He described the decision taken by the OPEC+ cartel to reduce crude supply amid the time of high prices as a "mature," Financial Times reported. Prince Abdulaziz bin Salman stated that the decision to produce less oil from next month has resulted in a rift with the US. However, he stressed that the decision was important to give a bigger spare capacity buffer if the sanctions imposed on Russian exports or any other events result in global supply reduction. 

Speaking at the Future Investment Initiative Investor Conference in Riyadh, Saudi Arabia's Energy minister underscored that they need to ensure that they develop a situation where they have the ability to respond if the situation turns worse. He announced that they will supply more oil if a nation seeks oil from them, as per the report.

Notably, Saudi Arabia's Energy Minister Prince Abdulaziz bin Salman is also the chairman of OPEC+. He stated that Saudi Arabia decided to be "maturer" and added that "people are depleting their emergency stocks" for using it as a "mechanism to manipulate markets." His statement comes after the OPEC+ alliance of oil-exporting nations announced the decision to sharply reduce production. It is pertinent to note here that global energy prices have witnessed a rise since Russia's offensive in Ukraine. 

“You need to make sure you build a situation where if things [get] worse you have the ability to [respond],” Financial Times quoted Prince Abdulaziz bin Salman as saying at Future Investment Initiative investor conference.

“Running out of capacity has a much dearer cost than what people can imagine. We will be the supplier of those who want us to supply.” he added.

OPEC+ announces reduction in oil production 

On October 5, the OPEC+ alliance announced a reduction in oil production. Energy ministers announced a production cut by more than 2 million barrels per day starting in November, according to AP. The Energy ministers made the announcement in their first face-to-face meeting at the Vienna headquarters of the OPEC oil cartel since the start of the COVID-19 pandemic. Saudi Energy Minister Prince Abdulaziz bin Salman said that the decision was taken on the basis of "uncertainty" involving the global economy and oil market outlooks. White House press secretary Karine Jean-Pierre said that US President Joe Biden regarded the decision made by OPEC+ as "short-sighted" as the global economy continues to deal with Russian President Vladimir Putin's offensive in Ukraine. Karine Jean-Pierre said that OPEC+ has "aligned" with Russia. 

Inputs from AP

Image: AP