Saudi Energy Minister: Saudi Arabia won’t sell oil to any country that sets a price limits


Saudi Energy Minister Prince Abdulaziz bin Salman said in an interview with (Energy Intelligence) on Tuesday, that the OPEC + alliance will adhere to the production cuts agreed upon in October until the end of the year.

“There are those who continue to believe that we will amend the agreement… I say they need to wait until Friday, December 29, 2023, for us to prove to them our commitment to the current agreement,” the Saudi Energy Minister added.

The Saudi Energy Minister said that there is a big difference between the NOPEC bill proposed by the US Senate and the price ceiling imposed by Western countries on Moscow because of the Russian invasion of Ukraine, but their potential impact on the oil market is similar.

Last week, members of the Democrat and Republican parties in the US Senate reintroduced the bill called “No Oil Production and Export Cartels” or (NOPEC).

Its passage would change US antitrust law to withdraw the sovereign immunity that protects members of the OPEC+ group and its national oil companies in lawsuits over price collusion.

Several attempts have been made to legalize NOPEC over more than two decades.

“The NOPEC draft law doesn’t take into account the importance of having a reserve of productive capacity and the consequences of not having this reserve on the oil market,” the Saudi Energy Minister said.

He added that the draft law would weaken investments in oil production capacity and cause a decrease in global supply, explaining that imposing a price ceiling would have the same effect.

The Saudi Energy Minister continued by saying that the price ceiling, whether imposed on a country or a group of countries, will lead to “an individual or collective adverse reaction with unacceptable repercussions represented by large fluctuations and instability in the markets”.

He added, “If a price limit is imposed on Saudi oil exports, we won’t sell oil to any country that imposes a price cap on our supplies, and we will reduce oil production, and I won’t be surprised if other countries take the same measure.”

The Group of Seven major countries, the European Union and Australia applied a price ceiling of $60 a barrel to shipments of Russian oil transported by sea on December 5th.

Russia said it would cut its supplies by 500,000 barrel per day as of March.

The Saudi Energy Minister said that global demand growth will exceed current global production capacity reserves, while emergency stocks are at an all-time low, and that’s why it’s important to implement policies that support the investments required to increase production capacity in a timely manner, and to maintain adequate and appropriate levels of global emergency stocks… Despite the outlook for global economic growth, the situation is still unclear regarding the future of growth recovery at a time when China is opening its borders after scrapping strict Zero-Covid policies.

He finally said that one of the other influencing factors will be the extent of interest rate increases that will be decided by central banks in order to control inflation.

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