Oil rises as new Saudi minister commits to output cuts

Oil rises as new Saudi minister commits to output cuts

Saudi Arabia announces it wants to go nuclear

In yet another Palace coup, the Kingdom's veteran Energy Minister Khalid al-Falih has been sacked and replaced by King Salman's son Prince Abdulaziz bin Salman, while the Deputy Energy Minister has also been removed.

Saudi Arabia has led production cuts as OPEC's kingpin to keep oil prices from sliding further, even as Iranian and Venezuelan oil exports are down due to USA sanctions.

Saudi Arabia's new Energy Minister, Prince Abdulaziz bin Salman takes a tour at an exhibition during the 24th World Energy Congress in Abu Dhabi, United Arab Emirates September 9, 2019.

It is widely speculated that dissatisfaction with Khalid al-Falih grew over the continuing low oil prices despite the Kingdom agreeing to a continued oil output cut.

Saudi Arabia's new energy minister Prince Abdulaziz bin Salman has assured India that his country will remain a reliable supplier to the world's third-largest energy consumer and is committed to investing in the country.

Prince Abdulaziz said he wouldn't describe concerns over global trade tensions that are impacting oil prices as a "trade war", saying: "I'm fundamentally an optimist".

"Oil prices are down on concern that the USA administration could ease its stance versus Iran, which could see disrupted Iranian oil barrels returning to the market if United States sanctions against Iran get eased".

The energy minister of non-OPEC Oman, Mohammed Bin Hamad Al-Rumhy, said Muscat would like to see oil at $70 a barrel.

The Buzzard oil field in the North Sea
The Buzzard oil field in the North Sea

Prince Abdulaziz's appointment as Energy minister underscores the key challenges being faced by Saudi Arabia as the country is mired in uncertainty over the future prices of its crude and oil, as well as a sluggish shift to a more diversified global entity.

OPEC on Wednesday cut its forecast for growth in world oil demand in 2020 due to an economic slowdown, an outlook the producer group said highlighted the need for ongoing efforts to prevent a new glut of crude.

In the most recent period, foreign reserves fell by a total of nearly $14 billion in June and July, as lower prices hit export earnings, after increasing by $32 billion over the previous 20 months. Riyadh will continue to back the OPEC+ coalition that combines Russian Federation and other producers with members the Organization of Petroleum Exporting Countries.

Still, that's considerably below the $80-$85 a barrel that analysts say is needed to balance Saudi Arabia's budget.

Citing a copy of a document it had seen, the global news outlet said US Energy Secretary Rick Perry had granted six secret authorizations to companies to sell the know-how to the desert kingdom as part of a hoped-for broader deal on nuclear power. "The new Saudi energy minister has not said anything that deviates from the previous policy".

He told reporters on the sidelines of an energy conference in Abu Dhabi that the OPEC+ alliance was "staying for the long term" and called on OPEC members to comply with output targets.

A banker close to Saudi Aramco said the oil company was focused on driving through the IPO this year.

Latest News