(Photo Credit: Aramco)
Saudi Energy Minister Prince Abdulaziz bin Salman on 14 March said that Riyadh will stop selling oil to any country that imposes a price cap on its supplies.
“If a price cap were to be imposed on Saudi oil exports, we will not sell oil to any country that imposes a price cap on our supply, and we will reduce oil production, and I would not be surprised if others do the same,” the senior Saudi official said in an interview published by Energy Intelligence.
Bin Salman stressed that price caps – whether imposed on a country or a group of countries – would lead to “individual or collective counter-responses with intolerable consequences in the form of massive volatility and instability.”
In December, the G7, the EU, and Australia imposed a $60 price cap on seaborne cargoes of Russian oil as part of wide-ranging sanctions meant to stifle the Russian economy, causing alarm in oil-producing states.
The Saudi official went on to add that the OPEC+ alliance would uphold significant oil production cuts until the end of the year, saying: “There are those who continue to think we would adjust the agreement … I say they need to wait until Friday 29 December 2023 to demonstrate to them our commitment to the current agreement.”
Elsewhere in the interview, Bin Salman criticized the efforts of US lawmakers to re-introduce the so-called No Oil Producing and Exporting Cartels (NOPEC) bill in congress.
“The NOPEC bill does not recognize the importance of holding spare capacity and the consequences of not holding spare capacity on market stability,” he said, highlighting that the contentious legislation would undermine investments in oil capacity and cause global supply to fall.
If passed, NOPEC would change US antitrust law to revoke the sovereign immunity that protects nations and their oil companies from prosecution.
Tensions have been running high over the past year between Saudi Arabia and the US. These nearly boiled over last October OPEC+ – a bloc of OPEC and non-OPEC oil-producing nations, including Russia – decided to cut oil production levels by two million barrels per day (bpd) despite intense lobbying from the west.