Summary
- S. says more than one OPEC state forced into the cut
- Iraq, Kuwait, and other OPEC+ members back the decision
- Saudi defense minister says decision was entirely economic
OPEC+ member states assembled on Sunday to approve the steep cut to its output target agreed in October after the White House, intensifying a war of words with Saudi Arabia, accused Riyadh of forcing some other nations into backing the move.
The United States last week said the cut would increase Russia’s foreign earnings and suggested it had been set up for political reasons by Saudi Arabia, which on Sunday denied it was backing Moscow in its invasion of Ukraine.
Saudi King Salman bin Abdulaziz said the kingdom was making great efforts to support stability and balance in oil markets, including forming and upholding the agreement of the OPEC+ alliance. OPEC+ consists of the Organization of the Petroleum Exporting Countries (OPEC) and other producers including Russia.
The Saudi defense minister, King Salman’s son Prince Khalid bin Salman, also said the Oct. 5 decision to cut output by 2 million barrels per day (bpd) – despite supply tightness in oil markets – was unanimous and hinged on economic factors.
His remarks were supported by ministers of several OPEC+ member states including the United Arab Emirates.
The UAE’s energy minister, Suhail al-Mazrouei, wrote on Twitter: “I would like to clarify that the latest OPEC+ decision, which was unanimously approved, was a purely technical decision, with NO political intentions whatsoever.”
His comment came after a statement from Iraq’s state oil marketer SOMO.
A SOMO statement said:
“There is complete consensus among OPEC+ countries that the best approach …is a pre-emptive approach that supports market stability and provides the guidance needed for the future.”
Kuwait Petroleum Corporation Chief Executive Nawaf Saud al-Sabah also accepted the decision by OPEC+ and said the country was eager to maintain balanced oil markets, state news agency KUNA reported.
‘Purely Technical’
Bahrain and Oman gave matching comments in separate statements. Algerian energy minister Mohamed Arkab, meanwhile, regarded the decision as “historic” and said that he and OPEC Secretary General Haitham Al Ghais backed it fully, Algeria’s Ennahar TV reported.
In a statement to reporters on Monday, Arkab said the OPEC+ decision, was “a purely technical response based on purely economic considerations”.
Oil inventories in advanced economies are lower compared to when OPEC cut output in the past. Some analysts have said that recent turmoil in crude markets could be resolved by a cut that would help bring in investors.
Umer Karim, a research fellow at the University of Birmingham, said OPEC states are working towards project unity. Karim stated:
“The emphasis on the word ‘technical’ also suggests that these member states are sending a message to the U.S. that they are not a party in this row between Riyadh and Washington.”
U.S. National Security Council spokesman John Kirby on Thursday said that “more than one” OPEC member had felt compelled by Saudi Arabia into the vote, adding that the cut would also boost Russia’s revenue and reduce the effectiveness of sanctions placed over its invasion of Ukraine.
Buy Crypto NowKing Salman said in an address to the kingdom’s advisory Shura Council that the country was a mediator of peace and underscored the crown prince’s initiative to free prisoners of war from Russia in September.
Khalid bin Salman on Sunday said he was “astonished” by accusations his country was “standing with Russia in its war with Ukraine”.
“It is telling that these false accusations did not come from the Ukrainian government,” he wrote on Twitter.
