Russia oil price cap political, OPEC decision economic: Saudi Minister

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Saudi Energy Minister Prince Abdulaziz bin Salman considered on Sunday that the impact of European sanctions and the G7 imposed price cap on Russian oil "did not bring clear results yet."

"What is happening now in terms of sanctions and price caps imposed and all of it really did not bring clear results, including measures implemented on Dec. 5, we see a state of uncertainty in implementation," the Saudi Minister told a forum held following the country's 2023 budget announcements in Riyadh.

He indicated that Moscow's response to these tools needed to be taken into consideration when looking at the state of play in global markets.

Referring to the price cap imposed on Russian crude oil, Prince Abdulaziz pointed out that "these tools were created for political purposes and it is not clear yet whether they can achieve these political purposes."

The Saudi diplomat said other factors affecting the market going into 2023 include China's Covid-19 policies, adding that the impact on China's economy from easing Covid-19 restrictions still "needs time".

The Minister further explained that "central banks are still preoccupied with managing inflation, no matter the cost of these measures and their possible negative impact on global economic growth."

Prince Abdulaziz considered that when taken into consideration, the OPEC+ decision to cut production by two million barrels per day was proven to be correct.

On December 4, OPEC+ decided to maintain its oil production targets in line with the October accord when the group reduced output by two million barrels of oil per day.

Prince Abdulaziz affirmed that OPEC+ would continue to focus on market stability in the coming year, pointing out that every member of the alliance takes part in decision-making.

"Group action requires agreement and therefore I continue to insist that every OPEC+ member, whether a big or small producer...be a part of decision-making," he said, noting that "consensus has positive implications on the market."

The Saudi Minister stressed that OPEC+ takes its decisions from a purely economic perspective regardless of any political considerations, in the wake of Western accusations of the coalition taking the decision to cut production for political reasons.

Read more: KSA denies oil output hike discussion, says OPEC+ may cut if needed