26 June 2018, News Wires — Saudi Arabia promised to act decisively to keep oil prices under control, signaling a real supply boost approaching 1 million barrels a day is on the way to global markets.
“We will do whatever is necessary to keep the market in balance,” Saudi Energy Minister Khalid Al-Falih told reporters on Saturday, while sitting alongside his Russian counterpart Alexander Novak at OPEC headquarters in Vienna. Consumers can rest assured that “their energy supplies are available, are being stewarded by a responsible group of producers.”
Al-Falih went out of his way to give a detailed explanation of how the socalled OPEC+ deal will work, clarifying a vaguely worded agreement and contradictory statements from other ministers that spurred a rally in crude futures on Friday. It would be troubling if that jump in prices became a trend, the minister said, adding that producers with spare capacity, such as Saudi Arabia, can fill any gap left by falling production elsewhere.
“The only country that can increase production is Saudi Arabia, so its interpretation of the deal is the one that matters,” said Ann-Louise Hittle, a veteran OPEC watcher at consultant Wood Mackenzie.
Al-Falih’s assurances — backed up by Novak — follow pressure from US President Donald Trump’s anti-OPEC tweeting, as well as more conventional lobbying by major oil buyers. They give Saudi Arabia and Russia more room to ease consumer anxiety about prices, but risk a backlash from Iran and Venezuela, founder members of the Organization or Petroleum Exporting Countries that insist members can’t snatch one another’s market share.
An Iranian OPEC delegate immediately criticized the Saudi position, saying the agreement didn’t allow any member to replace someone else’s market share. Countries that do so will be cheating on the deal, the delegate said, asking not to be named because of the sensitivity of the matter. Venezuela’s Energy Minister Manuel Quevedo made the same argument on Twitter.