Saudi Arabia signals cautious approach to oil production

Speaking to Bloomberg TV in an interview, the energy minister of Saudi Arabia, Prince Abdulaziz bin Salman, has said that his country will continue to advocate caution in the OPEC+ group when it comes to changing oil production.

In a move that angered some major oil consumers, the OPEC+ group recently cut its production quotas. The group will next meet in early December to discuss whether to increase production again, make further cuts, or maintain the current status. It will be looking, according to Prince Abdulaziz, at the considerable uncertainty and the global economic status, with the International Monetary Fund recently predicting that many economies may experience a slowdown. He said:

“Our theme is being cautious. It’s about being responsible and not losing sight of what the market requires.”

Despite crude oil prices having declined since they peaked in June, some point to factors that could potentially trigger a shortage of supply. First, importing Russian crude into the European Union will soon be effectively banned, while China recently relaxed some of its restrictions to control the spread of COVID-19. Nevertheless, Prince Abdulaziz suggested this may not make that much difference to oil demand by saying:

“The jury is still out. The Chinese authorities are saying they are going to continue to be strict and diligent and follow the same regimentation that they have.”

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