Page 9 - NorthAmOil Week 06 2023

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Prince Abdulaziz to maintain

caution on production

GLOBAL SAUDI Energy Minister and de-facto OPEC+ reaffirmed their commitment to the DoC
kingpin Prince Abdulziz bin Salman Al Saud which extends to the end of 2023 as agreed in
said this week he would continue to be cautious the 33rd OPEC and non-OPEC Ministerial
about increasing oil production. This comes Meeting (ONOMM) on 5th of October 2022,
despite increased optimism among bankers and and urged all participating countries to achieve
analysts that growing demand could lead to a full conformity and adhere to the compensation
rapid rise in the oil price with OPEC+ not devi- mechanism.”
ating from its recent restraint. The October deal saw OPEC reduce its
“I will believe it when I see it and then act,” allocated production level from 26.7mn bpd This comes
Prince Abdulaziz said during a discussion with by a ‘voluntary adjustment’ of 1.27mn bpd to
energy historian and S&P Global vice chairman 25.4mn bpd, while its non-OPEC partners cut despite increased
Daniel Yergin. Following the announcement by just over 700,000 bpd. Saudi Arabia and
that OPEC+ would continue to stick to the level Russia each made a voluntary cut of 526,000 optimism among
agreed when it reduced quotas by 2mn barrels bpd, though in reality Russian production had
per day (bpd) in October, the minister said already been hampered by a shrinking market bankers and
the group’s action had been vindicated despite for its crude following Western restrictions on analysts that
high-profile, though brief, tensions with the US purchases.
which continues to lobby for lower prices. The theoretical withholding of crude pro- growing demand
The October announcement led to a jump the duction by OPEC+ has led banks such as Gold-
price of crude. “If people had trusted us at the man Sachs and Morgan Stanley to forecast Brent could lead to a
time, we wouldn’t have gone through the fears prices in excess of $100 per barrel during Q3
that happened.” He said. owing to reduced inventories. rapid rise in the
OPEC’s Joint Ministerial Monitoring Com- Meanwhile, Prince Abdulaziz cautioned oil price.
mittee (JMMC) met on February 1, after which against sanctioning energy producers, suggest-
it said: “The Committee reviewed the crude oil ing that these would come back to haunt con-
production data for the months of November sumer nations that depend on major import
and December 2022 and noted the overall con- volumes.
formity for participating OPEC and non-OPEC “All these sanctions, embargoes, they’re all
countries of the Declaration of Cooperation going to curl up into one thing and one thing
(DoC).” only: lack of energy supply of any kind when it’s
It added: “The Members of the JMMC most needed. That is my concern,” he said.™

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