Page 8 - MEOG Week 21 2022

MEOG POLICY & SECURITY MEOG

Saudi: Russia will remain part of OPEC+

SAUDI ARABIA SAUDI Arabia says it will continue to include noting, though, that Riyadh has cited other rea-
Russia in the OPEC+ group and intends to con- sons for resisting Western calls for production
tinue to work with Russia and other non-OPEC hikes that do not involve Moscow or the Russian
oil-producing states to balance global energy invasion of Ukraine.
markets, despite Western sanctions on the trade Specifically, Saudi officials have said repeat-
in Russian crude. edly that they do not believe prices are high as a
Prince Abdulaziz bin Salman, the kingdom’s result of true supply shortages.
energy minister, told the Financial Times in Prince Abdulaziz stressed this point in the
an interview published on May 22 that Riyadh interview, saying that crude oil prices – and, con-
aimed to continue including Moscow in agree- sequently, retail fuel prices – were running high
ments between members of the OPEC+ group. because of inadequate global refining capacity.
Saudi Arabia aims “to work out an agreement “The determinant of the market is refinery
with OPEC+ ... which includes Russia,” he said. capacity” and unlocking additional processing
He also asserted that there was objective value capacity, he told the newspaper. Over the last
in co-operation between oil producers and said three years, he added, global refining capacity
that the “world should appreciate the value” of an has gone down by around 4mn barrels per day
alliance such as OPEC+. (bpd), with more than half of the total, or 2.7mn
The prince was speaking at a time when bpd, lost since the outbreak of the coronavirus
OPEC+ is gearing up for discussions on new (COVID-19) pandemic.
production quotas. The prince went on to say that he could not
The regime that the group’s members put in predict what kind of decisions OPEC+ might
place in April 2020 is scheduled to expire in three make about production quotas in its next
months’ time, and Saudi Arabia, like other pro- agreement.
ducers, has come under considerable pressure to The group may boost output if global mar-
raise output in order to bring prices down from ket conditions warrant such a move, he said, but
their current level – pressure it has so far ignored. “the havoc you see now” is substantial enough to
Front-month Brent crude futures were trad- make forecasts premature. The only thing that
ing at more than $113 per barrel in London as of is certain, he remarked, is that there is merit in
May 23. This is below the eight-year record highs producers working together to stabilise world
reported in early March, shortly after the Russian oil markets.
invasion of Ukraine, but not by much. The OPEC+ group’s April 2020 agreement
The Financial Times described Prince Abdu- allows for a collective 430,000 bpd rise in pro-
laziz’s statements as “an important sign of sup- duction each month, with the increase divided
port for Russia” from Saudi Arabia. It is worth among all member states. ™

P8 www. NEWSBASE .com Week 21 25•May•2022