Saudi energy minister predicts era of ‘perpetual stability in world oil’

Saudi Energy Minister Prince Abdul Aziz bin Salman at the Energy Week International Forum in Moscow. (Reuters)
Updated 06 October 2019

Saudi energy minister predicts era of ‘perpetual stability in world oil’

  • Kingdom’s ‘marriage of convenience’ with Russia will benefit global economy, Moscow industry summit hears

MOSCOW: The relationship between Saudi Arabia and Russia brings an opportunity for “perpetual stability” in global oil markets, Prince Abdul Aziz bin Salman, the Kingdom’s energy minister, told a gathering of energy industry leaders in Moscow.

“We could not be doing better than what we are doing today. It’s quite a marriage of convenience. We are in an alliance because there is a lot of rationale in that alliance. It did not come because there is emotion in it, but is a result of straight thinking about what we could do together,” the minister told a packed hall at the Russian Energy Week summit of global energy leaders in Moscow.

The panel was on the theme of “global energy — new alliances,” and both the energy minister and his Russian counterpart Alexander Novak stressed the common interests in the “OPEC+” arrangement, whereby global oil producers coordinate output levels to ensure price and supply stability.

Prince Abdul Aziz said: “I am always conscious of the effect of the oil market on the global economy, and I believe the OPEC+ agreement will help ensure the perpetual stability of the oil market to the benefit of producers, consumers, the energy industry and the world economy.”

Novak agreed that the output agreement — signed first in 2017 and reinforced with a charter last year — had brought “some stability” to global oil markets, but he was worried about what he called “black swans” in the form of global economic and geopolitical factors.

FASTFACT

OPEC members supply about 43.5 percent of the world’s crude oil production.

“There is a lot of uncertainty in the market. For example, trade wars between certain countries is leading to lower demand and consumption. There are also sanctions introduced by one big country that seems to proclaim weekly sanctions against some other country,” he said, in a reference to US actions against Russia and others.

“Black swans are more important than supply and demand in the oil market at the moment, but it is good we have common ground in the oil markets,” Novak added.

In a keynote speech later, President Putin said that the OPEC+ deal was “the first-ever successful interaction between OPEC and non-OPEC.

“What matters is supply predictability and reliability. We have a business-like approach with our energy partners in Europe and the rest of the world, of a commercial nature with no political reasoning,” Putin added.

Mohammed Barkindo, secretary general of OPEC, told delegates: “OPEC+ has become a reliable and dependable source of supply. The world should not panic.”


Saudi business chiefs back 2020 budget

Updated 44 min 57 sec ago

Saudi business chiefs back 2020 budget

  • 2020 spending plan hailed as a positive driver in boosting country’s economy

RIYADH: Saudi businesses have welcomed spending plans of SR1.02 trillion ($272 billion) next year, announced by King Salman.

The Council of Saudi Chambers praised the efforts of the monarch, Crown Prince Mohammed bin Salman and others in reaching an agreement on the 2020 budget.

The government has predicted revenues of SR833 billion and a deficit of SR187 billion for next year, considered an indicator of the success of the Kingdom’s economic policies amid a bleak global economic backdrop.

Chairman of the Council of Saudi Chambers Dr. Sami Abdullah Al-Abaidi said that the Saudi business sector was optimistic about the new spending plans.

“These figures reflect the effective impact of the economic reform measures, the economy’s restructuring and diversification of sources of income,” he added.

Al-Abaidi praised the king and the crown prince for supporting the Saudi economy through numerous projects and initiatives aimed at boosting the business sector.

He said the most notable were business performance improvement initiatives, privatization, private-sector stimulation and local promotion programs.

“This has paved the way for the Kingdom to get the best international classifications, including its first world ranking in business environment reforms, which made it a hub for investments,” Al-Abaidi added.

The business chief reiterated King Salman’s determination to continue implementing reforms, diversifying sources of income, making optimal use of resources, empowering the private sector, and improving transparency and efficiency in government spending to boost growth rates.

“These trends are one of the most important requirements for achieving the Kingdom’s Vision 2030,” he said.

The council’s vice chairman, Muneer bin Saad, said the budget for the new year focused on investing in the human element and sectors that directly affected the lives of citizens, including the development of services.

Saad added the monarch had directed to extend the disbursement of the cost of living allowance until the end of 2020.

Council member Abdullah Al-Odaim said the budget met the expectations of Saudi citizens, and strengthened the confidence of international investors, as figures showed the determination of the state to move forward in its policies to raise the efficiency of government spending.

They also showed increases in non-oil revenues, projected to grow more in light of the improvement of economic activity.

The delegated secretary-general of the Council of Saudi Chambers, Hussain Al-Abdulqader, said the Saudi business sector welcomed the budget which through
its projects and programs would help improve investment opportunities as well as the Saudi economy, ultimately strengthening the Kingdom’s global economic standing.