OPEC+ Will Remain Proactive, Pre-Emptive, Saudi Oil Minister Says

OPEC+ Will Remain Proactive, Pre-Emptive, Saudi Oil Minister Says

Given market uncertainty, OPEC and its allies must continue to be proactive, according to the Saudi Arabian oil minister, Bloomberg reported.

“The market has been subject to some extreme shocks and if it were not for the proactive approach and the pre-emptive steps that OPEC+ adopted, these shocks would have created havoc in oil markets,” Prince Abdulaziz bin Salman told the Saudi Press Agency in an interview published late on Tuesday.

This year saw a spike in the volatility of the oil markets, primarily due to Russia’s invasion of Ukraine. Many political figures became concerned about prices when petroleum soared into triple digits and asked that oil companies take action to reduce them.

OPEC+ announced in October that it will reduce output because it anticipated that the market would be oversupplied in the fourth quarter and until 2023. Though tensions have since subsided, that action incensed the US.

“We leave politics out of our decision-making process, out of our assessments and forecasting, and we focus solely on market fundamentals,” Prince Abdulaziz said.

Brent prices have fallen by almost 35% to $80 per barrel since early June as worries about a global economic slowdown have grown.

“The signal they want to send to the market is that they stand ready to cut, if they need to,” Vandana Hari, founder of Vanda Insights, said to Bloomberg TV on Wednesday, referring to OPEC+ and the prince’s comments. “OPEC+ is really worried about declining demand next year leading the markets into over-supply again.”

According to her, the 23-nation coalition, which is headed by Saudi Arabia and Russia, may try to protect Brent prices at $70 per barrel.

“Perhaps when prices reach those levels you can expect them to start talking again,” she said. “They’ll remain in wait-and-watch mode for the time being because there are huge uncertainties with regard to demand and China’s reopening.”


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