Saudi minister blames media and analysts for 'fiddling' with oil market

Prince Abdulaziz bin Salman further says issue over UAE production quota was quickly sorted over 'very nice' lunch in Abu Dhabi

Russia's Deputy Prime Minister Alexander Novak, right, and Saudi Arabia's Energy Minister Prince Abdulaziz bin Salman, at the St Petersburg International Economic Forum. Reuters
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The Opec+ alliance's decision to gradually unwind some of its output cuts was not driven by a need to chase market share, Saudi Arabia’s energy minister said on Thursday.

Prince Abdulaziz bin Salman was speaking in Russia, at the St Petersburg International Economic Forum.

He criticised media speculation and market analyses surrounding Opec+ meetings, saying such conduct “fiddled with the market”.

“In all of the cases, they will try to raise expectations about what Opec+ will do. So, when that decision is taken, it would have to be lower than that expectation," Prince Abdulaziz said during a ministerial panel.

People were speculating about whether the UAE will be staying in Opec. That issue of production was sorted out over a lunch in Abu Dhabi - a very nice Japanese lunch
Prince Abdulaziz bin Salman

"They fiddle with the market. Sunday was no exception.

“People are now saying that Opec+ is shifting from being a price fixer to a market share fighter.”

On Sunday, Opec+, responsible for supplying about 40 per cent of the world's crude oil, agreed to extend its output cuts of 3.66 million barrels per day, originally set to conclude this year, until the end of 2025.

Meanwhile, the additional 2.2 million bpd voluntary production cuts of eight Opec+ member states were extended by three months until the end of September. The group also released a plan for gradually unwinding the voluntary curbs on a monthly basis from October 2024 until September 2025.

Brent, the benchmark for two thirds of the world’s oil, has dropped more than 3 per cent this week as traders fear that the return of those additional barrels into the market would cause a supply glut.

Opec expects oil demand to grow by 2.2 million bpd this year, which is almost double the 1.1 million bpd increase forecast by the Paris-based International Energy Agency.

“Demand numbers [in the first quarter] are already 2.3 million bpd high [and] that’s typically the worst quarter of the year,” Haitham Al Ghais, Opec’s secretary general said during the same session.

Mr Al Ghais said that higher demand for travel and aviation will boost crude consumption from the second quarter through the third quarter.

“We do feel that demand should be strong, and if that continues at this rate, I believe our numbers will prove to be the most accurate in the market,” he said.

‘Japanese lunch’

The Saudi energy minister said that the issue of the UAE’s production quota was sorted out over a 30-minute Japanese lunch with his Emirati counterpart in Abu Dhabi.

The UAE, which plans to raise its production to 5 million bpd, has been given an output quota of an additional 300,000 bpd, which will be phased in gradually over the first nine months of 2025.

“People were even speculating about whether the UAE will be staying or not staying in Opec. That issue of production was sorted out over a lunch in Abu Dhabi, a very nice Japanese lunch," Prince Abdulaziz said.

The UAE is committed to Opec+, consumers, and the stability of the market, the country’s energy minister said.

Suhail Al Mazrouei, UAE Minister of Energy and Infrastructure, called the countries making voluntary cuts within Opec+ “the great eight” and said they had been “sacrificing” additional barrels to stabilise the market.

Meanwhile, Russian Deputy Prime Minister Alexander Novak said the adjustment in Opec+ policy was leading the group in the "right direction."

"We're going to be able to respond to the situation that is unfolding in a timely manner, to what is happening in the market and the uncertainties that emerge," Mr Novak said.

Updated: June 06, 2024, 12:33 PM