Saudi Arabia’s oil minister, Abdulaziz bin Salman, stated in an interview with Bloomberg that OPEC+ needed to be careful in its approach to oil production changes despite rising prices.
Higher production, according to Bin Salman, is only justified when there is a clear purpose for it, which he believes is now lacking as utilities transition from gas or coal to oil on a small scale.
Even without the possible return of Venezuela or Iran to international markets, the energy minister predicted a considerable increase in combined OPEC+ oil output by the end of next year.
“We don’t take things for granted. We still have Covid, there are still lockdowns,” and jet fuel supply remains constricted. “So, we’re not yet out of the box and we’re not out of the realm of COVID.”
Nigeria’s oil minister, Timipre Sylva, agreed with his Saudi colleague in a recent TV appearance in Riyad, saying the cartel should not rush into any output increases because demand is still threatened by Covid flare-ups.
Speaking to Bloomberg, he said: “We have to look at the situation closely before we take action. It’s still very fragile. We must be very cautious before we take the next move.”
“We’ve seen the slowdown in China. A lot of people are calling for more oil, but we’re looking at problems in some economies. We know that we haven’t completely opened up yet.”
Every month, OPEC+ adds 400,000 barrels per day to its total output, but certain members have found it difficult to increase production, resulting in over-compliance with the voluntary limits and ongoing tight supplies. The cartel, on the other hand, has so far rejected requests for a larger increase in output to keep up with demand.