The International Energy Agency foresees global oil consumption averaging a new record of 101.8 million barrels per day this year, primarily driven by surging Chinese demand.
Saudi Arabia’s energy minister, Prince Abdulaziz bin Salman, has defended the kingdom’s decision to extend oil production cuts, emphasizing that the move is not aimed at inflating prices, even as crude futures approach the $100 per barrel mark.
Earlier this month, Riyadh and Moscow jointly declared an extension of production and export cuts until the end of the year. Since then, Brent crude, the global oil benchmark, has surged by over 5%, reaching nearly $95 per barrel, marking a new high for 2023.
“It’s not about . . . jacking up prices, it’s about making the decisions that are right when we have the data,” Prince Abdulaziz bin Salman stated on Monday, marking his first public comments since the decision was made.
He further stressed that the certainty of a global economic recovery driving the surge in oil demand is still uncertain. “The jury’s still out about what will happen to Europe in terms of growth,” he conveyed to industry leaders convened at the World Petroleum Congress in Calgary, Canada. “The jury’s still out about what the central bankers will do in terms of additional interest rates . . . The jury’s still out about how the US economy will fare within the context of what’s happening globally.”
Many analysts anticipate a continued rise in oil prices due to production cuts limiting supply at a time of escalating worldwide demand. Mike Wirth, the CEO of US energy giant Chevron, joined the chorus on Monday, predicting that oil prices would soon breach the $100 per barrel threshold.
The International Energy Agency (IEA) foresees global oil consumption averaging a new record of 101.8 million barrels per day this year, primarily driven by surging Chinese demand. It is anticipated that the Saudi-Russia cuts will result in a “substantial deficit” in global oil markets for the remainder of the year.
Prince Abdulaziz, the half-brother of Saudi Crown Prince Mohammed bin Salman, also took aim at the IEA, escalating an ongoing dispute with the agency, asserting that it should be “ashamed” of some of its previous criticisms of the OPEC+ cartel, led by Saudi Arabia and Russia, regarding supply reductions.
“None of the things that they were warning about — and maybe anytime that they forecast — were as accurate as one would have hoped,” he added. “They have moved now from being a forecaster and assessors of the market to one of creating political advocacy.”
He indicated that the kingdom retains the flexibility to adjust the cuts as deemed necessary, but cautioned against hasty decisions. “It is not our wish to see the situation as it is today because it is not bad yet,” the minister affirmed.
Rising prices have amplified pressure on US President Joe Biden as he approaches re-election next year. Washington has been measured in its public commentary on Riyadh’s cuts, as it seeks to forge a deal to “normalize” relations between Saudi Arabia and Israel.
A high-level delegation from the kingdom is in New York this week for the UN General Assembly, which coincides with Prince Abdulaziz bin Salman’s remarks.