Saudi Arabia has declared that there is nothing more it can do to tame oil markets, implying that the world’s biggest crude exporter has no plan to accelerate its gradual production increases.
“As far as we are aware there is no shortfall of oil,” its foreign minister Prince Faisal bin Farhan said, speaking on a panel at the World Economic Forum in Davos, Switzerland.
“We have to be sure that while we transition to a renewable future, there is enough energy in the market. The kingdom has done what it can.”
Prince Faisal was responding to a question about what the US, which has put pressure on the Saudis and other members of OPEC+ to pump faster, could offer Riyadh in return for more crude. His comments echoed those of Saudi Energy Minister Abdulaziz bin Salman, who said in an interview this month that a refining crunch was to blame for soaring fuel prices.
“It’s much more complex than just bringing barrels to the market,” Prince Faisal said. “Our assessment is that actually oil supply right now is relatively in balance.”
Oil prices have climbed almost 70 per cent in the past year to around $110 a barrel, first as demand rebounded from the coronavirus pandemic and then after Russia invaded Ukraine.
The Organization of Petroleum Exporting Countries and its partners, a 23-nation group led by Riyadh and Russia, are raising daily crude production by around 430,000 barrels each month. Major importers including the US and Japan have called on the alliance, known as OPEC+, to increase output more quickly. The group’s struggling to reach even its current monthly target, with many members pumping below their quotas.
Pump prices for gasoline and diesel have hit record highs in the US in recent weeks, pushing up inflation putting pressure on US President Joe Biden ahead of November’s mid-term elections.
Saudi Arabia and neighboring United Arab Emirates have said that fuel prices have jumped so much because of a lack of investment in refineries across the world in the past several years. Pumping more crude would do little to help the market because refineries are largely at full capacity, they’ve argued.