Saudi Arabia's Energy Minister, Prince Abdulaziz bin Salman, has pointed the finger at media outlets and market analysts, accusing them of manipulating oil prices through speculation and inflated expectations surrounding OPEC+ meetings.
Speaking at the St. Petersburg International Economic Forum in Russia, Prince Abdulaziz criticized the "fiddling with the market" that occurs in the lead-up to OPEC+ gatherings. He argued that such practices distort market dynamics by artificially raising anticipation for specific production decisions.
"In all of the cases, they will try to raise expectations about what OPEC+ will do, " the Prince stated during a ministerial panel. "So when that decision is taken, it would have to be lower than that expectation. "
These remarks come on the heels of OPEC+'s decision to extend its existing production cuts of 3. 66 million barrels per day (bpd) until the end of 2025. The alliance, which includes Saudi Arabia and plays a significant role in global oil production, initially planned to phase out these cuts by the end of 2023. Additionally, OPEC+ agreed to a three-month extension of the voluntary production cuts currently implemented by eight member states, amounting to an additional 2. 2 million bpd.
Prince Abdulaziz emphasized that OPEC+ prioritizes market stability over chasing market share. He refuted recent analyses suggesting the alliance's production adjustments were motivated by a desire to outmaneuver competitors.
"The OPEC+ move to unwind output cuts is not driven by market share concerns, " the Prince asserted.
The global oil market has experienced significant volatility in recent months. Geopolitical tensions, particularly the ongoing conflict in Ukraine, have disrupted supply chains and driven energy prices upwards. Concerns surrounding a potential global economic slowdown have also introduced uncertainty into the market.
OPEC+ has faced criticism for its handling of oil production during this period. Some analysts argue that the alliance's cautious approach to increasing output has contributed to price hikes. However, OPEC+ maintains that its production cuts are necessary to prevent a price collapse similar to the one witnessed in 2020, when the COVID-19 pandemic triggered a sharp decline in demand.
The comments by Prince Abdulaziz highlight the complex relationship between OPEC+, the media, and market analysts. While the alliance seeks to maintain a stable oil market, media coverage and market speculation can influence investor behavior and ultimately impact oil prices.