Oil production cut decision is precautionary, Saudi Energy Minister

Saudi Energy Minister Prince Abdulaziz bin Salman said that the decision to cut oil production is a precautionary one. “We will continue to hedge as long as we do not see clarity and stability in the market and our mission is to give the oil market clear data for stability,” he said while speaking to reporters after the end of the OPEC Plus meeting.

Prince Abdulaziz pointed out that independent agencies will work with OPEC Plus countries with regard to evaluating their production in 2024, “Independent agencies will end the previous controversy over production data in OPEC Plus.”

Regarding Russia’s data, Prince Abdulaziz said, “we discussed with Russia the issue of its production and asked it to clarify its data, and we have strengthened the concept of transparency with Russia about its oil production figures.”

In a press conference following the meeting of the OPEC Plus coalition on Sunday, the minister said that the OPEC Plus agreement that was reached on Sunday is unprecedented, and that independent agencies will be assigned to verify the production capacity of each country.

He emphasized that the OPEC meeting was constructive and contributed to the stability of oil markets. “The recent measures reflect our responsibility as a mature central bank for oil. We want to prove to the world that we have the tools to stabilize the oil market and our decision helps to enhance the stability of the markets and prevents volatility, because the stability of the markets is the most important thing we have,” he said.

“We are not worried about supplies in the coming year. We do not target specific oil prices, but rather we aim to reduce market volatility,” the minister said while stressing that Russia is adhered to its commitments regarding oil production.

On Saudi-American relations Prince Abdulaziz said, “Our relationship with the United States has been going on for 80 years, and we look forward to more cooperation. All American officials are welcome to Saudi Arabia,” he said.

The Organization of the Petroleum Exporting Countries (OPEC) announced that the OPEC Plus group decided at its meeting on Sunday to adjust the bloc’s production level to 40.4 million barrels per day, starting from January 2024 and for a period of one year.

The alliance said, in a statement published by OPEC on its website, that it was agreed to hold the ministerial meeting of the group that includes OPEC members and non-OPEC producers, including Russia, every six months. The statement added that it was also agreed to hold the next meeting of the OPEC Plus group in Vienna on November 26.

OPEC Plus reached a deal on output policy after seven hours of talks and decided to reduce overall production targets from 2024 by a further total of 1.4 million barrels per day.