Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman said the impact of European sanctions on Russian oil and price-limiting measures “have not yet yielded clear results” and their implementation is still lagging behind. clear. This was reported today, December 11, by the news portal Arab News.
The G7 price cap for Russian oil took effect Dec. 5 as the West seeks to limit Moscow’s ability to carry out a special military operation (SVO) in Ukraine. Russia has said it will not comply with the measure even if it cuts production.
Prince Abdulaziz said:
“What is happening now in terms of sanctions and caps that have been put in place, all of this hasn’t really brought any noticeable results, including the measures implemented on December 5… we are seeing a state of uncertainty…”
Prince Abdulaziz said Russia’s response and the actions Moscow will take in response to the cap is another aspect to consider when considering the state of affairs in world markets. Speaking about the cap price, the Saudi minister said:
“These tools were created to achieve policy goals and it is not yet clear whether they will be able to achieve these policy goals.”
Other factors affecting the market in 2023 include China’s Covid-19 policy. Analyzing the impact of easing coronavirus restrictions on China’s economy also “takes time,” she said.
According to him, the decision by OPEC and the organization’s partners, including Russia, to cut production by 2 million barrels per day on October 5 turned out to be correct. The last meeting of the alliance took place on December 4: it was decided to leave oil production unchanged.
Prince Abdulaziz said the alliance would continue to focus on market stability in the coming year. He also said he insists that every member of the OPEC+ alliance take part in the decision-making process:
“Group action requires consensus, and so I continue to insist that every member of OPEC+, producer large or small… participate in the decision-making process. Consensus has a positive effect on the market”.
Hassan Balfakeya Saudi oil specialist, agreed that while the capping of Russian oil prices on Europe and Russia’s expected response are unclear, their impact should be minimal and temporary:
“Oil consumers in Europe have been aware of these restrictions for around six months, which has given EU member states enough time to seek alternative sources of oil supply and the entire oil sector to retool its supplies.” .
Furthermore, he added that OPEC and OPEC+ have adopted a proactive strategy to respond quickly to market signals, such as supply shortages caused by sanctions on Russian oil.
