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AFP
September 10, 2019

New Saudi oil minister endorses production cuts

World

AFP
September 10, 2019

Abu Dhabi: Saudi Arabia's new energy minister, Prince Abdulaziz bin Salman, said Monday that oil production cuts would benefit all exporting nations, in an indication he will support further reductions to address an oversupplied market and sagging prices.

In his first comments since being appointed by his father King Salman on Sunday, the minister signalled no major change in approach in Saudi Arabia, the de facto OPEC leader which pumps about a third of the cartel´s oil.

"The pillars of our oil policy are pre-determined and will not change," he told Saudi broadcaster Al-Arabiya. The prince was in Abu Dhabi to attend the World Energy Congress, followed by a meeting on Thursday of the Joint Ministerial Monitoring Committee (JMMC) of the OPEC+ alliance for a supply cut deal reached last year.

The ministers will consider fresh reductions, even though analysts are doubtful such a move would succeed in bolstering crude prices which have been badly dented by the US-China trade war. Crude prices are currently moving around levels of $60 a barrel, in contrast with more than $75 this time last year but up from around $50 at the end of December 2018.

Prince Abdulaziz said that the trade war, which has triggered fears of a global recession, has cast a "fog" over the oil market. However, he appeared to swing his support behind further curbs to rebalance the crude market.

"Cutting output will benefit all members of OPEC," he told Al-Arabiya on the sidelines of the conference. The appointment of Prince Abdulaziz, half-brother to de facto ruler Crown Prince Mohammed bin Salman, marks the first time a royal family member has been put in charge of the all-important energy ministry.

He replaces veteran official Khalid al-Falih as the world´s top crude exporter accelerates preparations for a much-anticipated stock listing of state-owned oil giant Aramco, expected to be the world´s biggest.

"Prince Abdulaziz is very experienced and has served in the energy industry for decades," Giovanni Staunovo, an analyst at UBS Group AG in Zurich, told Bloomberg News. "His comments today suggest we shouldn't expect any major policy changes from the kingdom, which still wants to see oil inventories falling."

The OPEC petroleum exporters´ cartel and key independent producers want to halt a slide in prices that has persisted despite previous output cuts and US sanctions that have squeezed supply from Iran and Venezuela.