Saudi Energy Minister: OPEC's decision was unanimous
OPEC's decision to drop oil production will remain in place until the end of the year despite early signs of increased oil demand.
Citing economic challenges such as high inflation and interest rate increases since last year, OPEC (The Organization of the Petroleum Exporting Countries) cut its forecast for 2022 global oil demand growth – planning to cut next year’s as well if the situation remains.
Saudi Energy Minister Abdulaziz bin Salman Al Saud said on Thursday that the alliance’s agreement to reduce oil production will remain in action until the end of the year 2023 despite increased oil demand. This is because early signs of rising demand are not enough to reverse the agreement.
"The current OPEC+ deal to reduce oil production will remain in effect until the end of 2023 because we cannot increase production only on the basis of initial signals of rising demand," the minister told Saudi Arabian broadcaster Asharq News.
The minister added that he "cannot predict demand in the market" and will only believe in increased demand when he really sees it.
OPEC+ reduced crude production to 9.7 million barrels per day back in May 2020 after the outbreak of Covid-19 following a drop in oil demand. Due to global energy market uncertainty and with a unanimous decision, the alliance again decided to reduce production by 2 million barrels per day in October.
Recent meetings have shown no potential change in OPEC’s terms of the output deal to this day.
Read more: OPEC+ agrees to stick to oil production plan
Despite other countries expressing serious concerns about the decision, it continues to remain in place. The US is concerned that OPEC's probable decision to reduce oil production will pose serious problems for Washington and may even be interpreted as a hostile act, according to a US Treasury report.
The Biden administration assembled its top energy, economic, and foreign policy officials to attempt to convince their Middle East allies, such as Saudi Arabia, the United Arab Emirates, and Kuwait to vote against decreasing oil production.
This has led the US to reevaluate its ties with the Kingdom ever since its support for the decision to lower oil production as it affects US national security interests. Concerned with the decision, the US administration viewed the decision as a hostile act, according to a US Treasury report. US officials went on to propose that the US stop providing weapons to KSA
Read more: US re-evaluating ties with KSA following OPEC+ decision: WH
The ministry assured countries who heavily criticized this position that since one is unable to predict future demands o the oil market, the agreed-upon decision was made jointly with members of the alliance; it is not solely Saudi Arabia’s decision.