RIYADH: Prince Abdul Aziz bin Salman, the energy minister of Saudi Arabia, said that oil markets should focus on the “enabling price” for oil rather than a “fair price.” Speaking at the Saudi-Russia CEO Forum in Riyadh, the minister said that it was more important to focus on a price that would be sustainable to drive worldwide economic growth. “The ‘fair price’ is a cultural issue, and I have no idea where it should be. The fair price is in the eye of the beholder.”
He added: “It is more important to focus on sustainability than a fair price. A sustainable price enables you to provide economic growth and allows budgets to be more transparent and visible.”
Speaking of the OPEC+ alliance driven by Saudi Arabia and Russia, he said: “A lot of people focus on maximizing short-term income, but as the enablers in Russia and Saudi Arabia it allows us to focus on the long-term direction for sustainable development.”
Alexander Novak, energy minister of Russia, endorsed the view of his Saudi counterpart. He said that the OPEC+ agreement represented the first time in history that there had been a high level of cooperation between major producers to control oil output.
“Russia is ready to cooperate long term in OPEC+. We are going to take that agreement to the next level, which is the highest level,” he said.
The ‘fair price’ is a cultural issue, and I have no idea where it should be.
Saudi Energy Minister Prince Abdul Aziz
Prince Abdul Aziz added that he believed current oil prices would be significantly lower if the OPEC+ agreement was not in effect. OPEC and non-OPEC members would be meeting regularly to monitor output by members. “We are willing to take all measures to maintain balance in the markets,” he said.
Yasir Al-Rumayyan, chairman of Saudi Aramco and governor of the Kingdom’s Public Investment Fund, told delegates at the forum that the oil price could have hit $130 per barrel after the attacks on Abqaiq and Khurais last month, had they not been dealt with so quickly and efficiently.
“Had Aramco not got its production back, it would have led to a global recession,” he said.
Novak said that geopolitical risk had an effect on the global energy markets. In a reference to the effects of US sanctions and tariffs on the world economy, he said: “Geopolitics plays a role. You can see that now we are doing much less investment in the US, and much more in Asia and the Middle East.”
On the same panel, Kirill Dmitriev, CEO of the Russian Direct Investment Fund, downplayed the risks from security concerns in the Middle East.
“We saw how quickly Saudi Aramco recovered from the terrible attacks of last month. We believe that Middle Eastern tensions are overblown. What we are witnessing in Saudi Arabia is the fastest transformation of an economy in the history of mankind. The opportunity outweighs the political risk,” he said.
