Saudi oil minister urges compliance with OPEC+ cuts

iStock
iStock

Saudi Arabia's energy minister on Thursday pressed oil cartel OPEC and its allies to comply fully with production cuts amid falling crude prices, insisting that doing so was "not an act of charity".

Last month, ministers of OPEC nations and other major oil producers stuck to an agreement to lower oil production, underlining that only strict compliance could restore stability to prices sent plummeting by the coronavirus pandemic.

But the oil cartel has called out laggards, including Nigeria and Iraq, for over-producing and failing to implement their share of the cuts.

"Full compliance is not an act of charity," Saudi Energy Minister Abdulaziz bin Salman said at a video conference of the expanded OPEC+ grouping of crude producing nations.

"It is an integral part of our collective effort to maximise the interest and gains of every individual member of this group."

The minister lashed out at members who were not complying, saying they were bringing "harm to our reputation and credibility" but without naming names.

"Tactics to over-produce and hide non-compliance have been tried many times in the past, and always end in failure," said the minister, half-brother of de facto Saudi ruler Crown Prince Mohammed bin Salman.

"They are damaging not only for those who carry them, but for us all."

Although more countries around the world are gradually moving out of lockdown, crude consumption has not returned to pre-confinement levels, which were already relatively low.

Under the terms of an agreement in April, OPEC and the so-called OPEC+ pledged to cut output by 9.7 million barrels per day (bpd) from May 1 until the end of June.

The cuts were then to be gradually eased from July, to 7.7 million bpd until December.

But crude prices have stubbornly traded in a narrow range for months, with both the US benchmark, West Texas Intermediate (WTI), and Europe's Brent North Sea contracts hovering around $40 per barrel.

We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For only R75 per month, you have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today.
Subscribe to News24
ZAR/USD
15.18
(-0.10)
ZAR/GBP
20.46
(-0.28)
ZAR/EUR
18.42
(-0.07)
ZAR/AUD
11.29
(-0.12)
ZAR/JPY
0.15
(+0.20)
Gold
1832.00
(-0.39)
Silver
24.09
(+0.26)
Platinum
1050.00
(+2.65)
Brent Crude
48.78
(+0.95)
Palladium
2336.00
(+1.19)
All Share
59419.37
(+0.80)
Top 40
54500.04
(+0.61)
Financial 15
11646.83
(+2.17)
Industrial 25
79758.36
(+0.10)
Resource 10
57015.33
(+0.70)
All JSE data delayed by at least 15 minutes morningstar logo
Company Snapshot
Voting Booth
Please select an option Oops! Something went wrong, please try again later.
Results
Yes, and I've gotten it.
21% - 380 votes
No, I did not.
52% - 942 votes
My landlord refused
27% - 496 votes
Vote