There is not a scarcity of oil on the market, but rather a lack of refining capacity, necessitating further investment in the capacity to transform crude oil into other types of oil products, Saudi Foreign Affairs Adel Al-Jubir said.
“We haven’t seen a lack of oil on the market as of yet. We need to expand investment in refining capacity since there is a scarcity, which is also an issue “Prince Faisal bin Farhan Al Saud, the foreign minister, told reporters in Tokyo.
He stated that “it will be impossible to maintain sufficient oil supply without the joint efforts of OPEC +.”
Oil prices fluctuated due to supply issues after Western sanctions on Russian crude and fuel supplies disrupted commercial shipments to refineries and then to consumers.
Additionally, there were growing concerns that the US central bank’s efforts to control inflation would result in a recession, which would lower future demand for fuel.
The Organization of Petroleum Exporting Countries (OPEC) and 13 other nations that sell oil make up the OPEC Plus alliance (OPEC). To guarantee the stability of the oil markets, this agreement was concluded in November 2016.
Following US President Joe Biden’s historic visit to the Kingdom, authorities stated that choices on oil policy will be made following market logic and within the framework of the OPEC + alliance. The words of the Saudi foreign minister now support those claims.
Late on Friday, Biden stated that Saudi Arabian authorities concurred with his “urgent need” to enhance oil supply and that he anticipated “more efforts in the coming weeks” in that direction.
Saudi officials emphasized that any decision to increase production will be made within the parameters of OPEC +, which will gather for its next meeting on August 3.
Adel al-Jubeir, the Saudi Arabian minister of state for foreign affairs, downplayed the prospect of a deal.
“The agreement is not at issue. We are closely monitoring the supply and demand situation as part of the kingdom’s long-term strategy to guarantee that there is an adequate supply of crude oil on the markets,” he said.
“We are attempting to expand crude oil output via and with our partners in case there is a potential shortfall,” he added. In OPEC and with our OPEC+ allies” he added.
The alliance started accelerating production increases in June in response to requests from consumers including the US. The situation might alter before the forthcoming meeting on August 3rd, though, with oil prices falling from recent highs and recession worries dominating the markets.
Saudi Arabia’s output is expected to hit 11 million barrels per day next month following the provisions of the current OPEC+ agreement, a level it has seldom maintained in its history as a crude oil exporter.