Saudi Energy Minister Prince Abdulaziz bin Salman said OPEC+ will take all necessary measures to support the oil market.
The minister was speaking on the sidelines of the eighth OPEC International Symposium in Vienna on Wednesday.
On Monday, Saudi Arabia said it would extend until August a 1 million-barrel-a-day production cut originally scheduled for July, while Russia announced a 500,000-barrel export cut next month.
The minister said Saudi Arabia’s voluntary cuts “due to another more urgent need in the market, or another more necessary expectation that OPEC+ should act”.
“If we want to treat everyone fairly, if we want everyone to work together, we have to make sure they focus on the most important topics and long-term issues. Diverting attention to another issue creates an imbalance, That creates an imbalance.” That’s why we chose to take the job on a temporary basis,” he said.
The minister noted that in June 2020, Saudi Arabia, the UAE, Kuwait and Oman made voluntary contributions for one month, with voluntary reductions starting in February 2021 for a period of three months.
“We’re doing this by gradually easing this cut until July 2021.”
“I ask you where we would be today if these steps had not been taken. I have assured the market that this stance is necessary,” he added.
Prince Abdulaziz explained that Russia’s production cuts were voluntary, noting that the simultaneous reduction in supply by Saudi Arabia and Russia demonstrated the strong cooperation between the two countries.
“Russia’s cut in oil production is significant because it affects exports,” he said.
The minister said that Saudi Arabia no longer plays the role of heavyweight oil producer, but OPEC+ will play this role.
He added that greater transparency depends on seven independent external agencies mandated to track output by countries involved in the output-cut agreement.
A recent report from the International Energy Agency (IEA) showed that Russia did not comply with production cuts in May, and the Saudi energy minister warned that the data could roil markets.
UAE Energy Minister Sohail Mazrouei stressed that oil-producing countries have a more comprehensive view of the market and put forward a realistic outlook on the balance between supply and demand.
Mazrouai explained that regular meetings of OPEC and OPEC+ can help limit volatility and restore market balance and stability through cooperation and joint efforts, especially since OPEC and OPEC+ members account for about 40% of global oil production.
“Our continuous efforts to monitor the market and related changes to ensure timely and effective measures are taken, which contribute to the stability of the overall market and the development of the global economy,” Mazrouei added in a statement issued by the WAM news agency.
He promised that additional oil output and export cuts announced earlier this week by Saudi Arabia and Russia would help balance the market.
The current total production cuts exceed 5 million barrels per day, equivalent to 5% of global oil production of about 100 million barrels per day.
Aramco CEO Amin Nasser noted that the corrective measures taken by Saudi Arabia will have an impact in the coming months and announced plans to increase gas production by 50% to 60% by 2030.
Also at the meeting, OPEC Secretary-General Haytham Ghais said the group was keen to stabilize markets, reduce its environmental footprint and move towards a sustainable and comprehensive energy transition.
In his welcome address to the conference, Gass added that “sustainability” revolves around balancing and meeting the needs of the present without compromising the needs of future generations.
He reviewed the importance of oil in global energy, the industry’s primary role in reducing carbon emissions, and OPEC’s efforts to achieve market stability, reduce the environmental footprint, and move towards a sustainable and comprehensive energy transition.