2023-07-05 11:53:39
According to analysts, Ryad is in fact very much alone in battling the markets, while Russia is reluctant to implement its commitments because it needs the oil windfall to finance its costly war in Ukraine.
Saudi Arabia’s energy minister brushed aside rumors of discord with Russia, its ally in oil-producing group OPEC+, on Wednesday, highlighting the coordinated extension of “voluntary” cuts unveiled this week. Ryad decided on Monday to extend the reduction of its quota by one million barrels per day in August to boost prices at half mast, Russia indicating in the process to lower its exports by 500,000 barrels per day.
This simultaneous announcement is “quite eloquent”, said Prince Abdelaziz bin Salman at the opening of an international OPEC seminar in Vienna, the organization’s headquarters. In addition to the desire to “stabilize the market”, he added, “we are acting in part to counter the cynical comments of observers” on alleged tensions between Saudi Arabia and Russia, two of the three largest producers of raw in the world.
“Independent sources to verify Russia’s figures”
According to analysts, Ryad is in fact very much alone in battling the markets, while Russia is reluctant to implement its commitments because it needs the oil windfall to finance its costly war in Ukraine. According to estimates, it is far from cutting its production from the promised volume and is concentrating on Asian markets such as India and China, which offer an alternative to Western sanctions adopted in response to the invasion of the ‘Ukraine.
Faced with these accusations, OPEC+ called on “independent sources to verify Russia’s figures”, recalled the Saudi minister. Moscow “has undertaken to carry out this exercise on a monthly basis”, he insisted. Asked regarding the mixed reaction of investors to recent production cuts, Prince Abdelaziz bin Salman called for patience, while deploring “the ambient negativism”.
“We will continue our efforts to surprise the markets (…), we will do everything necessary” in order to stabilize prices, he underlined.
The strategy of the alliance, made up of thirteen members of the Organization of the Petroleum Exporting Countries (OPEC) and their ten allies led by Russia, has so far failed to restore oil prices, undermined by concerns persistent for demand, particularly in China.
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