Prince Abdulaziz Suggests OPEC+ Will Stick to Current Output Targets for Remainder of 2023
Saudi Arabia's Energy Minister Prince Abdulaziz bin Salman has given his strongest indication yet that the current OPEC+ output targets, set in October, will remain in place until the end of the year. The OPEC+ alliance of oil producers agreed to cut production targets by 2 million barrels per day (bpd) from August 2022 required production levels, starting in November 2022.
Prince Abdulaziz has indicated that the threshold for intervention by the Organization of Petroleum Exporting Countries will be high. He said earlier this month that — with respect to production adjustments — “I will believe it when I see it and then take action.”
Delegates from the OPEC+ alliance have declared their intention to maintain the current output targets for the remainder of the year, despite Russia announcing an output cutback of 500,000 barrels per day last week in response to the European Union's sanctions.
At the beginning of 2023, oil has seen mixed results as traders try to measure the effects of China's re-opening on demand, Russia's supply restrictions due to the conflict in Ukraine, and worries that stricter US fiscal policy could lead to an economic downturn.
The UAE’s top energy official said that recent growth in oil inventories shows “there’s enough volumes in the market, and the price also is a testimony of the balance.” He also said that OPEC+ remains prepared to act if needed.
Last month, RBC Capital Markets LLC suggested that Abu Dhabi might aim for a greater goal in 2021, taking advantage of the additional capacity it has established in the past few years.
In a discussion reported by Energy Aspects, the minister stated that the oil company cannot augment production solely on initial indications. He said, “The Chinese economy’s unlocking and because of that you will have demand and what have you, but we all went through cycles of openings and lockdowns and therefore what assurances (would we have) and the world have that none of what we went through, all of us, every country, will not be repeated?”
The prince blamed the Paris-based International Energy Agency (IEA) and its initial predictions for a 3 million barrel per day (bpd) fall in Russian production for the US strategic petroleum reserve (SPR) releases last year.
0. “OPEC+ Targets Show Disconnect With Pumping Reality” Bloomberg, 17 Feb. 2023, https://www.bloomberg.com/opinion/articles/2023-02-17/opec-targets-show-disconnect-with-pumping-reality
1. “UAE energy minister sees no need for earlier than scheduled OPEC+ meeting | MEO” Middle East Online, 13 Feb. 2023, https://www.middle-east-online.com/en/uae-energy-minister-sees-no-need-earlier-scheduled-opec-meeting
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3. “Saudi Arabia: 2022 OPEC oil agreement “here to stay”” WorldOil, 17 Feb. 2023, https://worldoil.com/news/2023/2/17/saudi-arabia-2022-opec-oil-agreement-here-to-stay/
4. “UAE Says Oil Supply A Bigger Issue Than Demand For 2024” Yahoo! Voices, 14 Feb. 2023, https://www.yahoo.com/now/uae-says-more-worried-oil-091014001.html
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