Prince Abdulaziz bin Salman, the energy minister of Saudi Arabia, has defended the recent controversial production cuts by the OPEC+ group, while signalling that his country stands ready to increase production again if upcoming sanctions on Russia, or other unforeseen events, lead to a supply shortage.
Speaking in Riyadh at the investor conference Future Investment Initiative, Prince Abdulaziz said:
“You need to make sure you build a situation where if things [become] worse, you have the ability to [react]. Running out of capacity has a much dearer cost than what people can imagine…We will be the supplier of those who want us to supply.”
He argued that the decision to cut production was a “mature” one because without any spare production capacity, the OPEC+ group would have no way to react to any spike in prices caused by a future supply shock. Prince Abdulaziz also criticised the use of strategic crude oil reserves to bring down crude oil prices rather than keep them to address actual shortages, saying that this practice may in the coming month become “painful.”
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