Saudi Arabia to continue OPEC Plus-agreed production cuts

Producers are expected to discuss whether deeper cuts are needed.(File/AFP)
Updated 12 September 2019

Saudi Arabia to continue OPEC Plus-agreed production cuts

  • The Saudi and Russian energy ministers called on all producers to comply with oil production cuts under the OPEC-led supply agreement
  • Saudi Energy Minister Prince Abdulaziz bin Salman said all countries must comply with production cuts

Saudi Arabia will continue to cut oil production at a pace that exceeds its share in the OPEC Plus deal, the Kingdom’s energy minister Prince Abdulaziz bin Salman said.

The Saudi and Russian energy ministers called on all producers to comply with oil production cuts under the OPEC-led supply agreement ahead of Thursday’s joint ministerial oversight committee meeting.

Saudi Energy Minister Prince Abdulaziz bin Salman said all countries must comply with production cuts in order to stabilize the oil market among producers. He said Saudi Arabia’s oil policy would remain unchanged.

He said an announcement was scheduled that would reveal the course of steps to be taken by OPEC and its allies in the so-called “OPEC Plus alliance,” after the meeting of the ministerial committee in the United Arab Emirates on Thursday.

Russian Energy Minister Alexander Novak said the main goal of OPEC Plus was to maintain full compliance with the cuts, adding that joint efforts by producers would have a positive and sustainable impact on global oil markets.

Producers are expected to discuss whether deeper cuts are needed.


Oil prices surge after attacks hit Saudi output

Updated 16 September 2019

Oil prices surge after attacks hit Saudi output

  • The Houthi attacks hit two Aramco sites and effectively shut down six percent of the global oil supply
  • President Donald Trump said Sunday the US was ‘locked and loaded’ to respond to the attacks

HONG KONG: Oil prices saw a record surge Monday after attacks on two Saudi facilities slashed output in the world’s top producer by half, fueling fresh geopolitical fears as Donald Trump blamed Iran and raised the possibility of a military strike on the country.
Brent futures surged $12 in the first few minutes of business — the most in dollar terms since they were launched in 1988 and representing a jump of nearly 20 percent — while WTI jumped more than $8, or 15 percent.
Both contracts pared the gains but were both still more than 10 percent up.
The attack by Tehran-backed Houthi militia in neighboring Yemen, where a Saudi-led coalition is bogged down in a five-year war, hit two sites owned by state-run giant Aramco and effectively shut down six percent of the global oil supply.
Trump said Sunday the US was “locked and loaded” to respond to the attack, while Secretary of State Mike Pompeo said: “The United States will work with our partners and allies to ensure that energy markets remain well supplied and Iran is held accountable for its aggression.”
Tehran denies the accusations but the news revived fears of a conflict in the tinderbox Middle East after a series of attacks on oil tankers earlier this year that were also blamed on Iran.
“Tensions in the Middle East are rising quickly, meaning this story will continue to reverberate this week even after the knee-jerk panic in oil markets this morning,” said Jeffrey Halley, senior market analyst at OANDA.
Trump authorized the release of US supplies from its Strategic Petroleum Reserve, while Aramco said more than half of the five million barrels of production lost will be restored by tomorrow.
But the strikes raise concerns about the security of supplies from the world’s biggest producer.
Oil prices had dropped last week after news that Trump had fired his anti-Iran hawkish national security adviser John Bolton, which was seen as paving the way for an easing of tensions in the region.
“One thing we can say with confidence is that if part of the reason for last week’s fall in oil and improvement in geopolitical risk sentiment was the news of John Bolton’s sacking ... and thoughts this was a precursor to some form of rapprochement between Trump and Iran, then it is no longer valid,” said Ray Attrill at National Australia Bank.