Saudi minister: OPEC+ will take responsible approach to virus

Saudi Arabia's Minister of Energy Prince Abdul Aziz bin Salman Al-Saud has stressed that OPEC+ will do everything it can to tackle coronavirus. (Reuters)
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Updated 26 February 2020

Saudi minister: OPEC+ will take responsible approach to virus

  • Saudi Arabia supports the further oil production cut, but Russia is yet to announce its final position on the matter

RIYADH: Saudi Arabia’s energy minister said on Tuesday he was confident that OPEC and its partner oil-producing nations, the so-called OPEC+ group, would respond responsibly to the spread of the coronavirus.

He also said Saudi Arabia and Russia would continue to engage regarding oil policy.

“Everything serious requires being attended to,” the minister, Prince Abdul Aziz bin Salman, told reporters at an industry conference in Riyadh.

An OPEC+ committee this month recommended the group deepen its output cuts by an additional 600,000 barrels per day.

Saudi Arabia supports the further oil production cut, but Russia is yet to announce its final position on the matter.

The minister said he was still talking with Moscow and that he was confident of Riyadh’s partnership with the rest of the OPEC+ group.

“We did not run out of ideas, we have not closed our phones. There is always a good way of communicating through conference calls,” he said.

Regarding the coronavirus, which has impacted OPEC member Iran, he said OPEC+ members should not be complacent about the virus but added he was confident every OPEC+ member was a responsible and responsive producer.

The flu-like SARS-CoV-2 virus, which first broke out in China, has now spread to more than 20 countries.

“Of course there is an impact and we are assessing, but we’ll do whatever we can in our next meeting and we’ll address that issue,” UAE Energy Minister Suhail Al-Mazrouei said at the same industry conference.

Saudi Aramco CEO Amin Nasser on Monday said he expected a short-lived impact on oil demand.

“We think this is short term and I am confident that in the second half of the year there is going to be an improvement on the demand side, especially from China,” he said.

Oil climbed on Tuesday as investors sought bargains after crude benchmarks slumped almost 4 percent in the previous session, although concerns about the global spread of the virus capped gains.


Kuwait props up coronavirus-hit economy amid low oil prices

Updated 8 min 48 sec ago

Kuwait props up coronavirus-hit economy amid low oil prices

  • Kuwait was first Gulf state to halt passenger flights and impose a partial curfew to stem the spread of coronavirus
  • Kuwait has drawn down on its state fund, the General Reserve Fund, to cover its deficit

KUWAIT: Kuwait announced measures early on Wednesday aimed at shoring up its economy against the coronavirus pandemic, including soft long-term loans from local banks, and the central bank asked banks to ease loan repayments for companies affected.
Kuwait, which as of March 31 had registered 289 coronavirus cases, was the first Gulf state to halt passenger flights and impose a partial curfew to stem the spread of the highly infectious respiratory illness.
The sectors most impacted by the pandemic include aviation, hospitality and real estate, a government source told Reuters.
The stimulus package approved by the cabinet aims to provide liquidity for small- and medium-sized enterprises to meet their obligations, a government spokesman said.
That includes directing government agencies to pay obligations to the private sector as soon as possible.
The central bank separately has asked lenders to postpone loan repayments for three months for companies hit by the crisis, the governor, Mohammad Al-Hashel, said in a television interview posted by the central bank on Twitter.
Kuwait is also dealing with the impact of lower oil prices on its finances that is expected to lead to a higher government fiscal deficit this year.
The government source said that, in light of the oil price fall, passing a debt law allowing Kuwait to borrow more has become a “government priority.”
Kuwait has drawn down on its state fund, the General Reserve Fund, to cover its deficit. The source said the government withdrew 43.8 billion Kuwaiti dinars ($139.70 billion) in the five years until the 2018-2019 fiscal year, and 3.7 billion dinars in the 2019-2020 fiscal year.
This means the fund has around 14 billion dinars ($44.65 billion) left, the source said.
Moody’s this week placed Kuwait’s Aa2 rating on review for a downgrade, citing a “significant” decline in government revenues.
The government spokesman said maintaining Kuwait’s credit rating was one of the goals of the new economic measures.