Saudis Say Oil Decisions Are for OPEC+ as
Biden Leaves Kingdom
Saudi ministers insisted that oil policy decisions would be taken according to
market logic and within the
OPEC+ coalition, just as US President Joe Biden wrapped up a landmark
trip to the kingdom.
Biden said late Friday that the Saudis shared his “urgency” to increase oil
supply and he expects “further steps in the coming weeks” to that end.
Saudi officials stressed any decision to pump more would be made
in the framework of OPEC+, which holds its next decision-making meeting
on Aug. 3.
“We listen to our partners and friends from all over the world especially
consumer countries,” Foreign Minister Prince Faisal bin Farhan told reporters.
“But at the end of the day, OPEC+ follows the market situation and will supply
energy as needed.”
The OPEC+ coalition of producers includes Russia, whose oil revenues the US has
been trying to squeeze to punish it for its invasion of Ukraine. Riyadh was
clear that it’s sticking with the alliance.
Biden’s trip to the kingdom has been controversial at home, but gasoline prices
near record levels also pose political danger.
“I’m doing all I can to increase the supply for the United States of America,
which I expect to happen,” Biden said on Friday. “The Saudis share that urgency.
And based on our discussions today, I expect we’ll see further steps in the
Adel Al-Jubeir, minister of state for foreign affairs, played down the idea of
“It’s not about an agreement; it’s about the kingdom’s
long-standing policy of working to ensure that there’s adequate supply of crude
oil on the markets and we follow the supply and
demand situation very carefully,” he told Bloomberg in an interview. “If
there’s a potential shortage then we work on increasing crude oil production
through and with our OPEC partners and OPEC+ partners.”
The alliance already moved to accelerate production increases in June, after
calls from consumer nations including the US. Still, with oil prices tumbling
from recent highs as recession risks grip markets, the picture could change
before the policy meeting on Aug. 3.
In any case, further increases are expected to be modest as the Persian Gulf
heavyweights choose to preserve their remaining spare capacity amid supply
disruptions ranging from Libyan unrest to sanctions against Russia. The buffer
of idle output has dwindled to “razor-thin” levels of just over 2 million
barrels a day, according to the International Energy Agency.
Under the terms of the existing OPEC+ agreement, Saudi Arabia’s production is
due to reach 11 million barrels a day next month, a level it has only rarely
maintained in its decades as a crude exporter. Any further increases would test
the kingdom’s maximum sustainable capacity, which state-run giant Saudi Aramco
puts at 12 million barrels a day.