Saudi Energy Minister Prince Abdulaziz bin Salman said on Friday the OPEC+ decision to delay the start of output increases in the first quarter was based on fundamentals.
“There are so many things going on over the next two months but primarily the decision to delay bringing these barrels to the second quarter is tied to the issue that the first quarter is not a good quarter to bring in volumes as it is known to be a quarter for building stocks,” Prince Abdulaziz told CNBC in an interview, when asked how the incoming administration of U.S. President-elect Donald Trump would impact OPEC’s strategy.
OPEC+, which groups the de facto Saudi-led Organization of the Petroleum Exporting Countries with allies including Russia, on Thursday pushed back the start of oil output rises by three months until April and extended the full unwinding of cuts by a year until the end of 2026 due to weak demand and booming production outside the group.
The decision “also gives you a meaningful way to have a better understanding not necessarily of what will happen with regard to the U.S., respectfully, but there are so many other things – growth in China, growth in Europe, and lack of it thanks to transitioning, and what is happening in the U.S. economy, interest rate, inflation,” Prince Abdulaziz said. “There are too many moving parts. But honestly the primary cause for moving or shifting – bringing these barrels – is based on fundamentals.”
OPEC+, which pumps about half the world’s oil, had been planning to start unwinding cuts from October 2024 but a slowdown in global demand and rising output elsewhere forced it to postpone the plans on several occasions.
(Reporting by Maha El Dahan and Nadine Awadalla; editing by Jason Neely and Louise Heavens)