Tue, Oct 23, 2018 - Page 10 News List

Al-Falih says kingdom not to repeat 1973 oil crisis

NOT POLITICAL:Saudi Arabian Minister of Energy and Industry Khalid al-Falih said the kingdom would continue its decades-old stance of using oil policy as an economic tool

Bloomberg

Saudi Arabia has no intention of using its oil wealth as a political tool in the controversy over the killing of journalist Jamal Khashoggi and the kingdom plans to boost crude output again soon, the Saudi Arabian energy minister said yesterday.

“For decades, we used our oil policy as a responsible economic tool and isolated it from politics,” Saudi Arabian Minister of Energy and Industry Khalid al-Falih said in an interview with Russia’s TASS news agency. “So let’s hope that the world would deal with the political crisis — including the one with a Saudi Arabian citizen in Turkey — with wisdom.”

Al-Falih’s comments come just days after Saudi Arabia said that Khashoggi, a critic of Saudi Crown Prince Mohammad bin Salman, was killed in the kingdom’s consulate in Istanbul. The incident has damaged the kingdom’s image as a future investment hub.

Saudi Arabia last week vowed to retaliate against any punitive measures linked to Khashoggi’s fate, fueling concerns of oil price hikes.

Al-Falih said that there is no intention of repeating the 1973 oil embargo, in which the kingdom and several regional allies squeezed supplies to the US and Europe in retaliation for their support for Israel.

Saudi Arabia is ready to raise its output to 11 million barrels a day “in the near future,” and has the ability to lift production as high as 12 million barrels a day if the market requires it, al-Falih said.

The world needs to show its appreciation of the efforts and multibillion-dollar investment by Saudi Arabia that made this possible, he added.

There are limits to the kingdom’s ability to respond, al-Falih said.

If the supply gap created by disruption in Libya, Nigeria and Venezuela — as well as US sanctions on Iran — were to grow as large as 3 million barrels a day, Saudi Arabia would need to tap its oil reserves, he said.

Joint work between OPEC and non-OPEC oil producers needs to continue on a long-term basis, al-Falih said.

He said that he expects the cooperation agreement, initially signed in late 2016, to be extended to December at a meeting in Vienna.

The deal “will allow us to intervene to rebalance the market at any appropriate time from January onward,” he said.

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