She hinted at the rejection of sanctions against Russia.. Saudi Arabia: The world should appreciate the importance of OPEC + - Energy

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Saudi Arabia – which leads OPEC + – continues to emphasize keeping politics away from the OPEC + meetings, and stressing the great role it has played in the past two years in restoring stability to the oil markets. This was stated by Saudi Energy Minister Prince Abdulaziz bin Salman in an interview with the Financial Times newspaper.

Saudi Energy Minister Prince Abdulaziz bin Salman hinted that the OPEC + meetings will continue, and that they have nothing to do with politics.

The statement of the Saudi Energy Minister confirms what he said previously when he was asked by the anchor Hedley Gamble of the American station CNBC about how to deal with Russia, which invaded other countries. In an indirect reference to Iran, however, this country attends OPEC meetings.

The emphasis on separating politics from the OPEC + meetings comes despite tough Western sanctions against Moscow, and the European Union’s efforts to ban Russian oil imports, according to the British Financial Times.

The previous comments were considered by the British newspaper as an important sign of Saudi Arabia’s support – a traditional ally of the United States – for Moscow, despite sanctions against Russia and attempts to isolate it and reduce its oil production, but it is clear from the context that the newspaper’s conclusion does not agree with what the Saudi minister said.

global oil production

While energy consumers are facing record hikes in oil prices, at their highest level in a decade, the series of OPEC+ production cuts, first announced in April 2020, is expected to end within 3 months.

Sanctions against Russia - OPEC +
Saudi Energy Minister Prince Abdulaziz bin Salman – Photo from Reuters

Riyadh is resisting Western pressure to increase crude production, aimed at lowering prices in the wake of Russia’s invasion of Ukraine, and has insisted there is no shortage of supply.

The Financial Times’ questions focused on what OPEC + will do after the current production increase agreement expires near the end of this year.

The Saudi energy minister responded that it was too early to know what the new deal might look like after the current deal expires, given the uncertainty in the market, but added that OPEC+ would increase production “if demand exists.”

The prince pointed out that “with the problems we see now, it is too early to try to define the shape of the agreement, but what we know is that what we have achieved successfully is enough for people to say, there is an advantage, and there is value in being and working together.”

Russian production declines

OPEC+ is adhering to its agreement, in force since 2020, under which alliance members will increase total production by a modest amount of 432,000 barrels per day each month.

Despite this, sanctions against Russia have reduced Russian production since the beginning of the Ukraine war, as it fell from about 11 million barrels per day last March, to an average of 10 million barrels per day in April.

The International Energy Agency expects an additional drop of up to 3 million barrels per day, if Western powers tighten sanctions against Russia, which aim to reduce Europe’s dependence on Russian energy, including a ban on oil imports, at a time when India has increased its imports of Russian oil since the start of the war. .

Saudi Arabia’s role with Russia

Saudi Arabia, as the de facto leader of the Organization of the Petroleum Exporting Countries, and the world’s largest oil exporter, has been coordinating oil production quotas with Russia through OPEC+ since 2016.

The kingdom has been trying to follow a neutral path since the Russian invasion of Ukraine, as Crown Prince Mohammed bin Salman has spoken with Russian President Vladimir Putin twice since the invasion.

OPEC

The Saudi Energy Minister blamed the high oil prices on the lack of global refining capacity and high taxes, stressing that the determining factor in the market is refining capacity and how to benefit from it.

He continued, “During the past 3 years at least, the world has lost about 4 million barrels of refining capacity, of which 2.7 million barrels have been since the start of the Corona epidemic.”

European dispute over Russia

With the start of the Russian invasion of Ukraine on February 24, the West tried to avoid the issue of imposing sanctions against Russia, due to the reliance of many EU countries on Russian oil and gas supplies, but later America and Britain banned Russian imports in March.

Despite this, European Union countries remain at odds over measures to phase out Russian oil supplies, and this month dropped a proposal to ban the EU’s shipping industry from transporting Russian crude.

The Saudi energy minister commented on the matter, saying there is a need to keep OPEC+ out of politics, as the alliance is required to make “orderly adjustments” to move forward amid uncertainty over coronavirus-related shutdowns in China, global growth and supply chains.

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