ENERGY

Oil price spike over Libya prevented by OPEC+ supply cut: Saudi Energy Minister

Saudi Arabia’s energy minister says OPEC+ prevented oil price spike after Libya’s output halt. (World Economic Forum screen grab)

Saudi Arabian Energy Minister Prince Abdulaziz bin Salman said on Wednesday that the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as the OPEC+ group, safeguarded the oil market from witnessing a spike in prices after Libyan General Khalifa Haftar’s forces blocked Libya’s oil exports.

The OPEC+ deal is the reason that despite a production halt in Libya earlier in the week “you had two days of consecutive lower oil prices,” Prince Abdulaziz said during a panel at the World Economic Forum in Davos, Switzerland.

“OPEC and OPEC+, we’re vigilant of what is happening. The market sees that there is an attendance to this market,” he added.

Haftar recently shut down the country’s biggest oil fields and blocked exports at ports in a blow to the UN-backed government led by Prime Minister Fayez al-Sarraj who relied on the oil supplies as a key source of revenue.

OPEC and its allies surprised financial markets in December, committing to deepen the existing oil production cut agreement by an additional 500,000 bpd, bringing the total cut to 1.7 million bpd. OPEC has managed to keep world markets relatively stable, between $50 and $75 a barrel, for the past three years through its agreement.

Prince Abdulaziz also highlighted the Kingdom's plan to diversify its energy portfolio, noting that Riyadh is examining how to produce and enrich uranium to obtain nuclear power.

“We are also plugging ourselves into nuclear. A lot of people are asking us why we are engaged with nuclear, I say simply we want to have all of our options open,” he said.

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Last Update: Thursday, 23 January 2020 KSA 00:22 - GMT 21:22
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