Saudi Arabia’s powerful crown prince Mohammed bin Salman reaffirmed his backing for an extension to OPEC’s crude oil output cut beyond its current March 2018 deadline to rebalance the global market.
“The kingdom affirms its readiness to extend the production cut agreement, which proved its feasibility by rebalancing supply and demand,” the crown prince said in a statement.
OPEC members and 10 non-OPEC producers led by Russia, have committed to cut a combined 1.8 million b/d from the market in a bid to lower record high crude oil inventories. The initial six-month deal was extended in May to March 2018.
Mohammed bin Salman, the son of the reigning monarch King Salman al-Saud is the key driver of the OPEC kingpin’s oil policy.
“The high demand for oil has absorbed the increase in shale oil production,” he added.
“The journey towards restoring balance to markets, led by the kingdom, is proving successful despite the challenges,” he said.
While he has backed an extension, the details of any deal, including its length, allocations or any other new terms, will have to be negotiated before the coalition’s next meeting November 30 in Vienna.
An agreement is far from certain. Russian energy minister Alexander Novak, who is due to meet Saudi oil minister Khalid al-Falih in Riyadh this week, has said he does not see a need to announce any extension at the November 30 meeting.