Saudi Arabia’s Energy Minister, Prince Abdulaziz bin Salman, offered an impassioned defense of OPEC and allied exporters’ role in providing global market stability at a ministerial session on Friday, and exhorted fellow ministers to stick to their agreements.
OPEC and allied exporters are expected to agree deeper supply cuts later on Friday in an effort to cater for a wave of new barrels expected from rival producers next year, but adherence to the existing deal to restrain output by a total of 1.2 million barrels per day from 2018 levels has been patchy.
Speaking in front of dozens of ministers ahead of a closed-door policy-making session, Prince Abdulaziz emphasized that countries had to live up to their commitments and be prepared to look reality in the face in order to win the trust of global markets.
“It is almost disheartening to see people labouring even last night till 11 in the evening, squashing their heads and squeezing their brains to deliver us to a good agreement and a good continuity of what we all are firm believers of,” he said in reference to the previous day’s meeting, where ministers worked until 11pm on a deal. Ministers have yet to announce the details of the new agreement, but analysts expect an additional cut of at least 500,000 barrels per day versus October 2018 production levels.
“I would reiterate to all our friends that further commitment and further adherence will only allow us all to benefit from what we believe in,” Prince Abdulaziz said. “The markets will have to trust us, the analysts will have to believe us, without which we cannot deliver what we want to achieve. It is as simple as that and sometimes as tough as that. But without confronting realities and attending to realities I don’t think we will be achieving what we aspire for.”
Over recent months, OPEC and allied countries have largely adhered to their deal, but there are some notable exceptions including Nigeria, Iraq and Russia, according to reference data used by OPEC itself.
“Before this meeting we were all trying to figure out what to do, not only what to do but what to do in a convincing way, to ensure the market and the objective analysts and even the cynical analysts, that we are doing our job properly,” Prince Abdulaziz said.
“We want to ensure that what we committed to in the past and what we commit to in the future will be appropriately adhered to, attended to, and we are making ways for further, more shorter-term consultations, in the form of meetings, just to assure ourselves that this market will not be left unattended.”
An announcement is expected later on Friday. The new deal is expected to take effect from January and ministers are expected to hold another meeting in March, three months before the next schedule conference, to monitor compliance.