Saudi Arabia, OPEC’s de facto leader, will work for oil-market stability at a time of heightened U.S.-Iranian tension and wants to see sustainable prices and demand growth, the kingdom’s Energy Minister said on Monday.
Prince Abdulaziz bin Salman said it was too early to talk about whether the Organization of Petroleum Exporting Countries and its allies, a group known as OPEC+, would continue with production curbs set to expire in March.
“As tension remains high in our region, Saudi Arabia will continue to do all it can do to ensure stable oil markets,” the minister told an energy conference.
“We would like to have a stable oil market, sustainable growth in terms of demand, sustainable growth in terms of supply,” he said, adding that both high and low prices were undesirable. “The worst thing is to have low oil prices that permanently damage the industry.”
Oil prices held steady on Monday as the United States and Iran appeared to retreat from the brink of full blown confrontation after a U.S. drone strike killed an Iranian commander in Baghdad on Jan. 3 and Iran retaliated with missiles launched against U.S. bases in Iraq.
Prince Abdulaziz said the United States was a strategic partner with a big role in international security. “We’re leaving it to our friends in the U.S. to conduct themselves in the manner they see fit,” he said.
The world’s top oil exporter, Saudi Arabia suffered missile and drone attacks on its oil facilities on Sept. 14 that temporarily halved output.
Washington and Riyadh blamed Iran for the attacks, a charge Tehran denied.
“We have taken every precaution that can be taken,” the minister told reporters when asked whether Saudi Arabia had raised security after the recent U.S. and Iran strikes in Iraq.
He said the kingdom’s oil production stands at 9.744 million barrels a day (b/d) in January and would stay at the same level in February.
Iraq’s compliance with OPEC cuts improved in December and is looking for full compliance in January, he added.
The OPEC+ group of oil-producing countries last month agreed to rein in output by an extra 500,000 b/d in the first quarter of 2020, on top of a previously agreed reduction of 1.2 million b/d.
In addition, Saudi Arabia agreed to voluntarily hold its output 400,000 b/d beneath its quota, bringing the total effective cuts to 2.1 million b/d, or about 2 per cent of global supply.
OPEC+ members produce more than 40 per cent of global oil.