Prince Abdulaziz bin Salman, the Saudi Energy Minister told Bloomberg on Monday that OPEC+ production cuts could extend beyond March 2024 if the market requires it.
The Prince criticized the market’s response to the OPEC+ announcement, accusing commentators of wanting to be “conspiratorial” and failing to understand the deal.
On November 30, eight members of the expanded cartel announced voluntary cuts of around 2.2 million barrels per day for the first quarter of next year, including Saudi Arabia’s current voluntary cuts of 1 million barrels per day, as well as Russia’s 500,000 bpd voluntary cuts.
The market’s reaction to the OPEC+ voluntary cuts announcement was a further decline in oil prices. According to OilPrice.com, investors were bearish on the crude ahead of the OPEC+ meeting and had already priced in their anticipation that cuts would not be enough to move prices higher.
The prince emphasized that the 2.2 million in output cuts would be delivered. “I honestly believe that the 2.2 million will overcome the usual inventory build that usually happens in the first quarter,” he told Bloomberg.
He added that “we wanted the market to know there would be a phased-in approach” because the cartel cannot predict what the market situation will be in the first three months of the New Year. That required the cartel to “be careful about what language we use”.