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Sun. Jun 23rd, 2024

Saudi Arabia’s Minister of Energy, Prince Abdulaziz bin Salman, announced the Kingdom’s ambitious plan to increase its oil production capacity to 12.3 million barrels per day by 2028. This significant expansion aligns with the Kingdom’s strategic goals amidst evolving global energy markets.

The announcement came during a special panel discussion at the St. Petersburg International Economic Forum in Russia. The forum, themed “The Future of the Oil and Gas Market: Global Demand Outlook and Producers’ Plans,” was attended by several OPEC and non-OPEC ministers.

Prince Abdulaziz, who also serves as the chairman of the OPEC+ ministerial meetings, underscored the robust decisions made during the 37th OPEC and non-OPEC ministerial meeting held on June 2 in Riyadh.

He emphasized that the OPEC+ agreement allows for flexible adjustments to production, including temporary suspensions or reversals if market conditions necessitate.

Responding to market reactions and media interpretations, Prince Abdulaziz criticized some analysts for their negative portrayal of the OPEC+ decisions. He cited recent erroneous reports from major financial institutions, arguing that such narratives misrepresent the strength and foresight of the OPEC+ strategies.

Prince Abdulaziz reiterated the effectiveness of OPEC+ actions, particularly highlighting the success of the April 2020 meeting during the COVID-19 pandemic and the recent June meeting. He dismissed claims that OPEC+ is focused more on market share than price stabilization, asserting that OPEC+ consistently acts in the best interest of market stability.

Looking ahead, Prince Abdulaziz detailed Saudi Arabia’s plans to progressively increase oil production starting in 2025, with significant increments in 2026 and 2027, reaching the target of 12.3 million barrels per day by 2028. He also noted the Kingdom’s commitment to renewable energy, aiming to save one million barrels of oil currently used for electricity generation by expanding renewable energy sources.

In the broader context of OPEC+ decisions, the group agreed to gradually reduce production cuts by about 2 million barrels per day starting in October. Despite an initial drop in crude oil prices following the announcement, Prince Abdulaziz remains confident that the market will soon recognize the prudence of OPEC+ policies.

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