Saudi Arabia’s Oil Minister Ali Naimi said the Royal Kingdom is collaborating with its OPEC peers and non-members to stabilize the global oil market. “Saudi Arabia is a very reliable supplier. We cooperate with OPEC and non-OPEC countries to stabilize the market,” he said at a conference in Manama, Bahrain. He also encouraged an increase in global oil investments and the addition of new production capacity to meet global demand and ensure the short- and long-term stability of the market. Meanwhile, Saudi’s Gulf peer, the UAE, sees prices recovering beginning next year, adding that OPEC’s market share defense strategy is bearing fruit.
Ali Naimi: More Global Oil Investments Needed
OPEC has been producing north of its recommended production ceiling of 30 M/bpd for 17 consecutive months, pursuant to a market share defense strategy amid surging production principally from NAM and Russia.
Ali Naimi said the world economy is currently going through an unstable period. He said that oil demand is forecast to increase by 1 M/bpd every year in this decade, and that the more investments in oil are needed globally to make up for declining recovery rates. “[T]here should be a continuation if not an increase in the pace of investments in the petroleum industry to guarantee the stability of the market on the short and long term,” he said.
“There is a big drop in the production capacity of oil wells across the world, estimated around four million barrels a day, which means the petroleum industry needs new additional production capacity of around five million barrels a day every year…to meet the global demand,” he said.
57% of the world’s oil reserves are held by Arab countries, Ali Naimi said, adding that this will increase as new discoveries are made. Arab countries require $700 billion of energy investments over the next decade, while the region represents approximately 10% of world demand, he said.
UAE: “The OPEC Policy Is The Right One…”
At the same conference, a top official with the United Arab Emirates energy ministry said oil prices will begin recovering next year, indicating that OPEC’s market share protection strategy is bearing fruit.
“We believe that OPEC policy is the right one… Next year will see improvement in prices… In 2016 we could witness some correction in the market,” Matar al-Nyadi, undersecretary of the UAE’s energy ministry, said during the Manama conference.