Saudi Arabia’s King Salman said the Opec+ production agreement was “essential” for oil market stability and urged all participating countries to comply with the pact.
Oil market stability and balance are pillars of Saudi energy policy as crude supports the growth of the global economy, King Salman said in an annual speech to Saudi Arabia’s advisory Shura Council on Wednesday.
The kingdom is “keen to continue working with the Opec+ agreement, for its essential role in stabilising the oil markets”, he said in a speech published by state news agency SPA.
He also said efforts to maintain spare capacity had proven important to safeguard energy supply security.
Opec+ group, led by Saudi Arabia and Russia, has been instrumental in helping to balance the crude market, which had to deal with record low prices last year after demand for oil dropped amid Covid-19 pandemic-induced movement restrictions.
The group executed a historic reduction of 9.7 million barrels per day between May last year and July, but has tapered the supply cuts as demand improved.
Opec+ continues its monthly meetings, which are being convened to assess the state of the market and adjust supply accordingly.
Earlier this month, the 23-member group agreed to increase output by 400,000 barrels per day in January despite demand concerns due to the rising number of coronavirus infections globally.
The member countries will meet on January 4 to decide about future production cuts.
Last month, Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman said Opec+ brought stability to oil markets through its policies, which are announced in advance through monthly meetings.
The group “delivered more sustainability, more stability, more predictability and more transparency to oil markets”, Prince Abdulaziz told the Abu Dhabi International Petroleum Exhibition and Conference.
Brent, the global benchmark for more than half of the world’s crude, was trading close to $80 per barrel at 11.18am UAE time on Thursday as concerns about the Omicron coronavirus variant hitting demand eased and US inventories fell. US crude, West Texas Intermediate, was up 0.13 per cent at $76.66 per barrel.
Both benchmarks have rallied more than 50 per cent this year on the back of higher demand as global economies recover from the coronavirus pandemic.
Earlier this month, Opec raised its global oil demand forecast for the first quarter of 2022 but left its full-year growth projection unchanged as it said Omicron would only have a mild impact on demand. The group of crude exporters kept the world oil demand growth unchanged at 4.2 million bpd for 2022.