Saudi energy minister says oil deal may need to be extended but not necessarily for another six months


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Saudi Arabia’s energy minister Khalid Al Falih said the oil output restraint deal between 24 producers from within and outside of Opec may need to be extended beyond June of this year.

Mr Al Falih said the deal, which commits the producers to cut about 1.8 million barrels per day in the six months to the end of June, may not need to be extended for another six-month term but might require another 3 months.

The comments, made at the GCC Petroleum Media Forum in Abu Dhabi, were the first by the Saudi minister to indicate that the deal might require more time to work.

During a panel discussion, the Kuwaiti minister, Essam Al Marzooq, who was the chief architect of the deal and the most vocal proponent of an extension of the deal, said he expected his Saudi counterpart to support an extension: “Perhaps we will have an extension of this deal and I think brother Falih knows this,” Mr Al Marzooq said.

The deal has led to a rise in oil prices of about 20 per cent from last year’s average for benchmark North Sea Brent crude of US$45 to the mid to high $50s.

But even with near full compliance by Opec members, prices have stalled at this level and last month dropped and then recovered by 10 per cent, on worries that Russia – the main non-Opec partner in the deal – would not fully meet its pledged cuts, and also by a resurgence in US shale oil output of 400,000 bpd from last September’s trough of 8.6m bpd.

In a survey of the oil industry professionals and ministers at the forum before the ministers interview, a large majority felt that oil prices would drop back to the $40s later this year if there was no extension of the deal.

amcauley@thenational.ae

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Why your domicile status is important

Your UK residence status is assessed using the statutory residence test. While your residence status – ie where you live - is assessed every year, your domicile status is assessed over your lifetime.

Your domicile of origin generally comes from your parents and if your parents were not married, then it is decided by your father. Your domicile is generally the country your father considered his permanent home when you were born. 

UK residents who have their permanent home ("domicile") outside the UK may not have to pay UK tax on foreign income. For example, they do not pay tax on foreign income or gains if they are less than £2,000 in the tax year and do not transfer that gain to a UK bank account.

A UK-domiciled person, however, is liable for UK tax on their worldwide income and gains when they are resident in the UK.