Saudis hint at pumping more oil if energy crisis deteriorates

Prince Abdulaziz bin Salman said the move to produce less oil from next month, which has caused a rift with the US, was necessary to provide extra capacity if sanctions on Russian exports,oranyother unforeseen events, led toamajor dropin global supply. “You need to make sure you build a situationwhereif things [get]worseyou have the ability to [respond],” Prince Abdulaziz, who also chairs the oil producers’ group, told the Future Investment Initiative investor conference in Riyadh. “Running out of capacity has a much dearer cost than what people can imagine.”Headded: “Wewill be the supplierof thosewhowant us to supply.”The Opec+ output cut, announced thismonth, pushed oil prices higherjust as much of the world was struggling with soaring energy costs and rising inflation. The decision by its member countries, which includes Russia, provoked a backlash from the White House,which accused the cartel of helping to prop upRussia’swarinUkraine. Prince Abdulaziz used the onstage interview to present Saudi Arabia, the world’s biggest oil exporter, as a responsible energy provider. He criticised the US for withdrawing millions of barrels oil fromitsStrategic PetroleumReserve, theworld’slargest, to prevent prices rising faster. “We, as SaudiArabia, decided to be the maturer guys. People are depleting their emergency stocks . . . [using] it as a mechanism to manipulate markets when its profound purposeis tomitigate shortagesof supply.” OECD stocks were 243mn barrels below the five-year average at the end of August, said the International Energy Agency. US stocks are at their lowest since 1984. Relying on emergency stocks “may become painful in months to come”, PrinceAbdulazizwarned. Riyadh said production cuts were needed now to restore its spare capacity and avoid the possibility of a more dangerous rise in crude prices later. Critics said the kingdom’s aim was to prop up its own revenues by maintaining oil above $90 a barrel, almost twice the long-term historical price. Brent, the international oil benchmark, was tradingatabout$93a barrelyesterday. Prince Abdulaziz insisted Saudi Arabiawas ready to sendmore oil to Europe if EU sanctions on Russian crude, which come into full force on December 5, led to shortages that needed to be filled.