Saudi Arabia’s energy minister refuted claims of wanting to kill the U.S. shale oil industry through low oil prices during an interview on FOXBusiness TV on Wednesday.
Saudi Arabia has good relations with its partners from the U.S. shale industry and wants them to prosper and not go out of business, Abdulaziz bin Salman Al Saud said.
When asked if lower oil prices aim to put the U.S. shale industry out of business, Al Saud rejected such allegations and said, "Never, I have friends, I have pals, we have good relationships with them […]”
The minister said that Saudi Arabia “wants to prosper with them”, and denied they ever engaged in such “a so-called zero-sum game.”
Low oil consumption, the rising supply glut around the world and weak crude prices due to the novel coronavirus (COVID-19) have caused a build-up in global oil stocks whose storage capacity is now more than 80% full.
Quarantine measures along with the decline in transportation and weak economic activities have decreased global oil demand by around 20 million barrels per day (bpd). To mitigate the negative impact of COVID-19, Saudi Arabia and Russia met on March 6 but failed to make deeper output cuts, which pushed crude prices on March 30 to their lowest levels since 2002.
Led by the two countries, the 23-member group, known as OPEC+, agreed on April 12 to curb their total output by 9.7 million bpd starting from May 1. However, the absence of cuts until then means oil companies and governments need to find solutions to the storage of produced crude.
By Sibel Morrow