Saudi Arabia is looking to address the energy requirements of some European countries after boosting its crude oil exports to the region last month, Saudi Energy Minister Prince Abdulaziz bin Salman said on Tuesday.
Saudi Aramco, the world’s largest oil exporting company, exported 950,000 barrels per day of crude to Europe last month, compared to 490,000 bpd in the same period a year earlier, the minister said at the Future Investment Initiative conference in Riyadh.
The kingdom is “engaged” with countries such as Germany and Poland to see if “any type of facilitations” are required, he said.
“They [European countries] are going through a phase of de-bottlenecking their supply chains and supply systems,” he said.
Europe is experiencing its worst energy crisis after Russia, the region’s biggest natural gas supplier, reduced its exports in response to EU’s wide-ranging economic sanctions. To prepare for the peak winter season, countries are restarting coal plants and boosting liquefied natural gas (LNG) imports from the US and Qatar.
This could be the “worst energy crisis” with the exception of the Covid-19 pandemic and countries should focus on finding a solution, instead of adopting “kicking the can” policies, the prince said.
Brent crude plunged to an 18-year low in 2020 after Covid restrictions erased global fuel demand. West Texas Intermediate, the gauge that tracks US crude, turned negative for the first time.
Brent crude, which surged to $140 a barrel after Russia’s invasion of Ukraine in February, was up 0.6 per cent at $93.80 a barrel as of 7.15 PM UAE time.
The US and the International Energy Agency (IEA) member countries have been releasing crude from their emergency reserves to bring fuel prices under control.
“People are depleting their emergency stocks [and have] used it as a mechanism to manipulate markets while its profound purpose was to mitigate shortages of supply,” the Saudi energy minister said.
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Saudi Arabia's Future Investment Initiative 2022 - in pictures
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Saudi Arabia's ambassador to the US, Princess Reema bint Bandar, speaks at the Future Investment Initiative conference in Riyadh. Reuters -
Noel Quinn, chief executive of HSBC Holdings Plc, speaks during a panel session on day two. Bloomberg -
Kamal Bahamdan, chief executive of Safanad Ltd. Saudi Arabia hopes the FII will put Riyadh on the map as a global destination for deals. Bloomberg -
Nelson Peltz, founder of Trian Fund Management, on day two of the conference in Riyadh. Bloomberg -
Saudi Minister of Finance Mohammed Al Jadaan speaks during a panel event. AFP -
A man in the mirror at the conference in Riyadh. Reuters -
Amin Nasser, chief executive of Saudi Aramco, front row fourth right, and Yasir Al Rumayyan, governor of the Public Investment Fund, front row third right, during day two of the conference. Bloomberg -
Amin Nasser, chief executive of Saudi Aramco, right, during a panel session. Bloomberg -
Yasir Al Rumayyan, governor of the Public Investment Fund, centre right, at the conference in Riyadh. Bloomberg -
Omar Abdulla Al Futtaim, chief executive of Al-Futtaim Group, arrives at a panel session on day two. Bloomberg -
David Grover, chief executive officer of Roshn Real Estate Co, centre, speaks to conference attendees. Bloomberg -
Steven Mnuchin, former US treasury secretary, appears onscreen during a panel session. Bloomberg -
Nabeel Alamudi, president of Olayan Financing Co, on day two of the conference in Riyadh. Bloomberg -
Sheikh Salman bin Khalifa Al Khalifa, Bahrain's Finance Minister, left, and Mr Mnuchin, second right, during a panel session. Bloomberg -
Saudi Energy Minister Prince Abdulaziz bin Salman at the annual Future Investment Initiative conference. AFP -
Princess Reema bint Bandar, Saudi ambassador to the US. AFP -
Jared Kushner, Donald Trump's son in law and founder of global investment firm Affinity Partners, was present. AFP -
Former Italy prime minister Matteo Renzi. AFP -
Saudi Arabia hopes the FII will put Riyadh on the map as a global destination for deals. Bloomberg -
Saudi Arabia also hopes to increase domestic investment through the event. Bloomberg -
Paddy Padmanathan of ACWA Power, centre. Bloomberg -
Lubna Olayan, chairman of Olayan Financing, speaks during a panel session. Bloomberg -
A busy FII conference hall between sessions. Bloomberg -
Jeannette zu Furstenberg, founding partner of La Famiglia venture capital fund, centre. Bloomberg -
Another busy concourse at the event. Bloomberg -
Omar Alsenayen of Jeddah Central Development Company, centre. Bloomberg -
The opening ceremony of the FII conference on a digital screen in the lobby of the Exhibition and Conference Centre at the Ritz Carlton Hotel in Riyadh. Reuters -
Arriving at the conference. AFP -
The queue at the entrance of the FII conference. Bloomberg
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“However, it is my firm duty to make it clear to the world that losing emergency stock may become painful in the months to come”
Last week, US President Joe Biden announced the release of 15 million barrels from the country’s Strategic Petroleum Reserve, completing a 180-million-barrel release announced in March.
Energy markets are going to enter a new phase of uncertainty once an EU ban on Russia crude comes into effect on December 5.
Russia will continue exporting crude to some countries through its pipelines, but it would still need to find a new market for more than 1 million bpd of crude by December, UBS said in a research note last week.
“We do have an uncertainty, [which] will come with some gloomier picture of what the next year would be,” the prince said.
The energy minister said countries could mitigate the situation by taking ‘pre-emptive’ measures.
This month, the Opec+ group of oil producing countries slashed its collective output by 2 million bpd on expectations of a global economic slowdown.
The International Monetary Fund has cut its growth forecast for 2023 and warned of a cost-of-living crisis as the global economy continues to be affected by the war in Ukraine, broadening inflation pressures and a slowdown in China.
“Just two days ago, it was reconfirmed that China will continue with its own [zero-Covid] policy, which means that the much talked about potential growth … will be still in waiting,” the prince said.
Crude production in Saudi Arabia increased by 236,000 bpd to 11.05 million bpd in August, while its exports in the month surged to a more than two-year high of 7.6 million bpd, according to latest data from the Joint Organisations Data Initiative.
