- Kingdom’s oil ministry ‘closely monitoring’ series of global situations that have led to volatility in the market
- 3% Oil prices retreated more than 3 percent on Friday, with May seeing the biggest monthly loss in six months
LONDON: The Saudi oil minister, Khalid Al-Falih, claimed there was an emerging consensus among OPEC+ oil producers over a need to ensure market stability, in an exclusive interview with Arab News.
The disclosure comes ahead of a key meeting of oil producers later this month which is set to deter- mine whether existing produc- tion cuts will be extended beyond June.
“We will do what is needed to sustain market stability beyond June,” said Al-Falih. “To me, that means drawing down inventories from their currently elevated levels.”
Oil prices had their worst monthly fall in the last six months in May as mounting global trade tensions weighed on prices and offset the upward pressure on crude created by supply disrup- tions and sanctions on Venezuela and Iran.
“Increasing trade friction and potential barriers would certainly have a negative impact on the global economy and oil demand growth,” said Al-Falih.
“The Kingdom is closely monitoring recent developments in the oil market, which exhibited an elevated level of volatility in recent weeks. And these levels are totally unwarranted in light of both the current market funda- mentals, which remain healthy, and the high levels of discipline by OPEC+ producers,” he added.
The minister emphasized the importance of the Saudi- Russia relationship in achieving a balanced global oil market, and said that ties between the two countries went beyond the energy sector.
“The Kingdom’s relationship with Russia extends beyond oil and OPEC+,” he said. “From the Public Investment Fund’s collab- oration with the Russian Direct Investment Fund ... to industrial investments in petrochemicals in Russia and the Kingdom ... to joint research in the energy field, manifested in the establishment of the Saudi Aramco research center at Moscow University ... to potential wheat imports to the Kingdom.
“In fact, I would emphasize that some of the premier Russian companies are considering investments in the Kingdom, and in addition to this, Aramco and SABIC are considering investments in promising gas and petrochemical projects in Russia.”
One such potential investment involves Russia’s largest integrated petrochemicals company, SIBUR, exploring the construction of a $1 billion natural rubber and specialty rubber joint-venture plant in Saudi Arabia, together with Saudi Aramco and French firm Total.