LONDON: UAE Energy Minister and OPEC President Suhail Al-Mazrouei said the US shale oil industry was “not a threat” to OPEC member oil-producing countries.
Speaking at an event in London on Feb. 20, he said it was important that the oil industry does not repeat the “mistakes of the past,” where producers became “so excited” by rising shale oil production that they overproduce, causing an imbalance in the market and job losses.
A glut in oil supply caused global oil prices to plummet from mid-2014.
Al-Mazrouei said OPEC plans to meet US shale oil producers at CeraWeek event in the US next month when they will explore the outlook for shale, rather than relying solely on analysts’ reports on the industry.
He underlined the commitment of all 24 OPEC and non-OPEC countries, including Russia, to continue to cut oil production by 1.8 million barrels per day until the end of 2018, following last November’s agreement.
“We are focused on what we agreed in 2017 to work together to balance the market,” he said, refuting suggestions of talks within any countries about an exit strategy from the deal.
“I don’t think we are talking about exit strategy for the time being, we are focused on one target, which is balancing the market,” he said.
Al-Mazrouei said he would like OPEC and non-OPEC oil producers to continue to work together beyond 2018 to ensure “market stability,” as the “job is not complete.”
Commercial oil stocks in the Organization for Economic Cooperation and Development (OECD) have fallen by more than 220 million barrels since the beginning of last year, compared to the five-year average, he said.
There remains a further 100 million barrels to remove from the market to reach the five-year OECD inventory average.
Al-Mazrouei confirmed there were plans for an alliance of the 24 non-OPEC and OPEC producers, but he refused to give details while the plans were still in draft form.
He expressed the hope that the alliance would not only be based on benefiting members, but also on “how we contribute to world economic growth.”
And he also reconfirmed previously reported recommendations that oil producer countries need to have capacity buffers in place to help deal with any shocks to the market.
OPEC president says shale no threat to group
OPEC president says shale no threat to group
How mining can transform Saudi Arabia’s economy
- Kingdom’s mineral wealth valued at $2.5tn, positioning mining as a third pillar of the national economy
RIYADH: Saudi Arabia is accelerating its push into mining as part of its economic transformation under Vision 2030, amid the growing importance of critical minerals and rare earths.
The Kingdom’s mineral wealth is valued at $2.5 trillion, positioning mining as a third pillar of the national economy alongside hydrocarbons.
The mining industry could give Saudi Arabia an edge in transition minerals and supply chains by expanding extraction, processing and the logistics needed to move materials to market, according to economists and industry specialists.
Saudi Arabia is home to more than 45 identified minerals, including gold, copper and uranium, according to the Vision 2030 strategy.
Momentum has been supported by measures aimed at making mining easier to invest in and faster to scale, including updated regulations, digital licensing platforms, specialized mining services, and new transport and rail links to mining areas.
Vision 2030 aims to raise mining’s contribution to gross domestic product to SR240 billion ($63 billion) by 2030, create 200,000 direct and indirect jobs, and attract $27 billion in new investment, according to published government targets.
Signs of progress are starting to show in the mining sector in terms of exploration activity, licensing and new discoveries.
“The mining strategy shows it’s working very well, evidenced by the rapid rise in exploration and industrial licenses, and major new mineral discoveries,” Talat Hafiz, an economist and financial analyst, told Arab News.
Saudi Arabia is undertaking the world’s largest geological survey, covering about 700,000 sq. km of the Arabian Shield for $1.5 billion, he said.
The number of mining licenses issued exceeds 2,000, according to official data, and the Kingdom’s mineral wealth is valued at 90 percent higher than it was in 2016 when Vision 2030 was rolled out.
A key milestone highlighted in Vision 2030’s mining strategy was the introduction of a new mining investment law, which reduced the tax rate to 20 percent from 45 percent to spur investment and align the sector with global standards.
The Kingdom’s mining resources position it well to be a critical supplier of raw materials that are integral to energy transition as clean-energy technologies require large volumes of mined materials.
Copper is central to electrification and power networks, while battery supply chains rely on minerals such as nickel and lithium. Phosphate is a key industrial input with wider economic value.
Reliable supplies of metals and minerals used in power grids, batteries and electric vehicles can attract investment and support downstream industry in the Kingdom.
Saudi Arabia’s Jabal Sayid site, northeast of Jeddah, ranks among the world’s top four resources for rare earth elements, Khalid Al-Mudaifer, vice minister of industry and mineral resources for mining affairs, recently told Al Eqtisadiah.
It will help meet Saudi Arabia’s needs for minerals used in magnet manufacturing, EVs and wind energy, while also supporting global supply, including the US market, he said.
Mining can also catalyze investment in the Kingdom, widen supply-chain employment, and boost non-oil exports and private-sector growth, according to economists and policymakers.
Mines, processing plants and the infrastructure around them require large upfront capital spending, creating a pipeline of work across construction, equipment, utilities and logistics.
“When a mining sector scales, the economic footprint extends well beyond extraction,” said Turki Al-Nahari, vice president of global mining at Ecolab, told Arab News. “Growth typically occurs across engineering services, industrial water management, logistics, laboratory testing, equipment reliability, environmental services and digital performance systems.
“That shift creates demand for skilled engineers, technicians, data analysts and operational specialists,” he added.
In 2025, Saudi Arabia’s mining exploration budget increased 600 percent to $146 million from $21 million in 2022.
“This growth is driven by ongoing geological surveys, technological advancements and higher exploitation budgets, all of which signal stability and opportunity, attracting foreign investment,” Manraj Lamba, a mining economics analyst at S&P Global, said in a recent report.
Mining projects are easier to finance when the size and quality of the deposit are clear, costs are competitive, and rules and taxes are stable, Abdullah Al-Harbi, an economist familiar with the industry, told Arab News.
Investors want solid feasibility work, credible timelines and evidence a project can stay profitable through swings in commodity prices, Al-Harbi said.
Saudi Arabia’s pipeline includes 24 exploration-stage projects and 17 more advanced developments, according to S&P Global.
“Its proactive approach to geological surveys and resource assessment has uncovered significant potential across gold, copper, phosphate and bauxite,” Lamba said.
Large projects also tend to generate employment across a wider industrial supply chain, including contractors, maintenance, laboratories, transport and a range of operational services.
To boost employment and support hiring and training, Saudi Arabia has moved to standardize job roles and skills for the mining industry.
HIGHLIGHT
Vision 2030 aims to raise mining’s contribution to gross domestic product to SR240 billion ($63 billion) by 2030, create 200,000 direct and indirect jobs, and attract $27 billion in new investment.
The Kingdom rolled out a framework related to employment and skills in the mining industry in January at the Global Labor Market Conference.
The framework is “a tool which ensures clear definitions of occupations and their required skills,” the Kingdom’s Minister of Industry and Mineral Resources Bandar Al-Khorayef said. It will cover more than 500 job roles, detail the necessary skills, responsibilities and titles, he added.
Exports from the sector are already rising in tandem with investments to develop the industry and create jobs.
Saudi Arabia exported 5.7 million tonnes of phosphate fertilizer in 2024, up about 6 percent from 2023, according to a GASTAT report.
As the energy transition accelerates, Saudi Arabia’s advantage may be strongest beyond extraction alone.
“Saudi Arabia’s most realistic advantage in the accelerating energy transition lies in combining selective mining with strong processing and refining capabilities, supported by its emerging role as a logistics and supply-chain hub,” Hafiz said.
The Kingdom’s position between Africa, Europe, and Asia favors downstream processing and value-added industries, he added.
“Saudi Arabia is prioritizing minerals that are both financeable and strategically aligned with emerging industries such as electric vehicles and clean energy technologies, where markets are clear, and demand is scalable,” Hafiz said.
Aluminum, phosphate, and similar commodities remain a key focus to support local manufacturing, infrastructure development and downstream industries while strengthening export capacity, he said.
“Once construction concludes, the priority shifts to operational stability and performance optimization,” Al-Nahari said.
“Small efficiency gains, applied consistently across large-scale operations, compound materially over time,” influencing cost as well as uptime and competitiveness over the life of a mine, he added.
As the global race toward electrification and decarbonization accelerates, the Kingdom is effectively positioning itself beyond its oil legacy with its strategic commitment to the minerals sector, which will play a critical role in powering the future.
Its investment in exploration, infrastructure, and downstream processing anchor it as a pivotal supplier in the critical minerals and rare earths value chain in the era of energy transition.
