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The warning came from Abdulaziz bin Salman, Saudi Energy minister who warned fellow OPEC+ ministers that if other producers continue to flout their output quotas in the agreement, oil prices could slump to US$50 per barrel, The Wall Street Journal reported on Wednesday, citing OPEC delegates who attended a conference call last week.
Saudi Arabia, the de facto leader of the Organization of the Petroleum Exporting Countries (OPEC) and its allies (OPEC+) has issued a stern warning that global oil prices could plummet to $50 per barrel if member nations fail to comply with their agreed-upon production cuts.
The warning came from Abdulaziz bin Salman, Saudi Energy minister who warned fellow OPEC+ ministers that if other producers continue to flout their output quotas in the agreement, oil prices could slump to US$50 per barrel, The Wall Street Journal reported on Wednesday, citing OPEC delegates who attended a conference call last week.
The warning from the most influential minister of the OPEC+ alliance was interpreted by other producers as a veiled threat that Saudi Arabia is fed up with quota cheaters and could go for a price war to defend its market share, the Journal’s sources said.
The message from the Saudi minister was that “there is no point in adding more barrels if there isn’t room for them in the market,” a delegate who attended last week’s call told the Journal.
Besides its share of the OPEC+ cuts in force since last summer, Saudi Arabia is also voluntarily keeping another 1 million barrels per day (bpd) off the market. It has been strictly sticking to its plan to produce “around 9 million bpd—it has been consistently in line with its targeted oil output over the past year.
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Iraq and Kazakhstan, on the other hand, have been major overproducers and have not kept their end of the deal. During last week’s call, Prince Abdulaziz bin Salman reportedly singled out these two producers – OPEC’s second-largest producer Iraq, and non-OPEC producer Kazakhstan. Non-OPEC Russia has also been a laggard in compliance with the OPEC+ deal.
