A Chevron station in Los Angeles displays a gasoline price per gallon of over $7 in June 2022. (Photo credit: FREDERIC J. BROWN/AFP/GETTY IMAGES)
Saudi Energy Minister Prince Abdulaziz bin Salman says that a major oil production cut implemented by the OPEC+ bloc of nations will remain in place until the end of this year.
“The agreement that we struck in October is here to stay for the rest of the year. Period,” he said in an interview published by Energy Aspects on 16 February.
Watch Dr Sen's exclusive interview with Prince Abdulaziz bin Salman, Saudi Arabia's energy minister. He cautions about global oil demand and details the worries about underinvestment in the oil sector https://t.co/j2YDlBfzAi pic.twitter.com/cEUsuHGCdc
— Energy Aspects (@EnergyAspects) February 16, 2023
Last October, OPEC+ – comprising OPEC member states and other allies, including Russia – agreed to cut oil production levels by 2 million barrels per day (bpd) until the end of 2023.
The move enraged US officials, who throughout 2022 pleaded with their Gulf allies to boost production levels to offset an energy crisis created by western sanctions on Russian fuel.
“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,” the Saudi energy minister added, stressing the benefits of the production cut on oil markets.
Earlier this week, OPEC raised its 2023 global oil demand growth forecast due to China relaxing COVID restrictions. However, Prince Abdulaziz said that more assurances are needed.
“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?” the Saudi official said.
He also blamed incorrect predictions made by the Paris-based International Energy Agency (IEA) for the US having to drain its strategic petroleum reserves (SPR) last year.
“The IEA was responsible for it because of the screaming and scaring they had done on how much Russia will lose in terms of its production,” Prince Abdulaziz stressed.