ENERGY

‘Low oil prices not our battle,’ Saudi deputy crown prince tells Bloomberg

Prince Mohammed bin Salman acknowledged that it would be favorable if oil prices rose, however, low prices were not of foremost concern. (File photo: AFP)

Low oil prices are not Saudi Arabia’s “battle,” the kingdom’s deputy crown prince said in an interview with Bloomberg published on Saturday, a day before a widely-anticipated OPEC meeting is held in Doha.

Prince Mohammed bin Salman, speaking at King Salman’s private farm in Diriyah, acknowledged that it would be favorable if oil prices rose, but said that low prices were not of foremost concern for Saudi Arabia.

“If prices went up to $60 or $70, that would be a strong factor to push forward the wheel of development,” Prince Mohammed said. “But this battle is not my battle. It’s the battle of others who are suffering from low oil prices.”

He added: “We have our own programs that don’t need high oil prices.”

Brent crude futures settled at $43.10 a barrel on Friday. The price has rebounded by more than 50 percent from a 12-year low of $32 a barrel in January.

Output freeze

All eyes are on Doha as producers, led by top exporters Saudi Arabia and Russia, meet on Sunday to discuss freezing output around current levels. The move would be an effort to contain a glut exacerbated by production that exceeds demand by about 1.5 million barrels a day.

The prince said that the kingdom, the world’s biggest crude exporter, would cap its market share at about 10.3 million to 10.4 million barrels a day, if producers agree to a freeze.

He said that Saudi Arabia would not freeze production unless other producers agree at the OPEC meeting.

“If all major producers don’t freeze production, we will not freeze production ... If we don’t freeze, then we will sell at any opportunity we get.”

Prince Mohammed also said that Saudi Arabia’s commitment to a production cap is dependent on Iran’s participation.

So far, Iran’s oil minister has shrugged off the prospect of joining the deal, labeling it “ridiculous.”

But a Russian official has said it was possible to reach a deal in Doha to freeze oil output, regardless of Iran whose crude shipments have risen by more than 600,000 barrels a day this month, according to Bloomberg.

Still, Prince Mohammed reiterated that OPEC will gain his support once all members reach a collective decision.

Last week, ratings agency Fitch downgraded its assessment of Saudi Arabia’s creditworthiness, taking its rating down one notch to AA- from AA in response to lower oil prices.

Earlier this month, the deputy crown prince announced plans to dedicate a $2 trillion fund for a post-oil economy, announced in a separate interview with Bloomberg.

The Public Investment Fund is aimed at helping reduce the kingdom’s dependency on oil. To achieve this, the fund is considering foreign opportunities and will seek a variety of investments. “So within 20 years, we will be an economy or state that doesn’t depend mainly on oil,” the prince had said.

Infographic: Saudi’s $2 trillion megafund: How to move on from oil

 


 

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Last Update: Monday, 25 April 2016 KSA 10:18 - GMT 07:18
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‘Low oil prices not our battle,’ Saudi deputy crown prince tells Bloomberg
Prince Mohammad bin Salman acknowledged that it would be favorable if oil prices rose, however, low prices were not of foremost concern
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