Better for OPEC+ to Remain Cautious: Saudi Minister

Saudi Energy Minister Prince Abdulaziz bin Salman said that it is better for OPEC+ countries to remain cautious, in the context of the different views on the market and the continuing state of economic uncertainty. “The group is moving hard and showing its cohesion and that it can stop or reverse course if necessary,” he told reporters after attending the OPEC+ meeting in Riyadh on Sunday.

Prince Abdulaziz announced that the Joint Ministerial Monitoring Committee of OPEC+ is scheduled to meet on August 1. On Sunday, OPEC+ agreed to extend the cuts of 3.66 million bpd by a year until the end of 2025 and prolong the cuts of 2.2 million bpd by three months until the end of September 2024. OPEC will spend one year on gradually phasing out cuts of 2.2 million bpd starting from October 2024 until the end of September 2025.

This decision aimed to support prices, in light of geopolitical and economic challenges looming over the market, with a tendency to increase production later. Regarding the prospect of allowing the UAE to pump more oil next year, Prince Abdulaziz said that the country’s production shortage as a percentage of its capacity was greater than other countries, and OPEC+ has now controlled it.

Prince Abdulaziz pointed out that the discussions between the eight OPEC+ countries, which had announced additional voluntary cuts, began two or three weeks ago. “We are waiting for interest rates to decline and global growth to take a better path, which will contribute to increasing demand. Some ministers met in Riyadh to ensure that we interact with each other, and that the message is comprehensively understood and agreed upon,” he said.

The OPEC+ countries, including Saudi Arabia, Russia, Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria, and Oman, held their in-person meeting in Riyadh on the sidelines of the 37th OPEC and non-OPEC Ministerial Meeting (ONOMM).