As the price of oil begins to falter, Saudi Arabia has stepped up its rhetoric, even going as far as to warn short sellers not to bet against the price of the commodity.
Saudi Energy Minister Prince Abdulaziz bin Salman gave “clear hints” on Thursday that there could be a change of direction in production policy forthcoming as the price of oil continues its slide, according to Bloomberg.
He said Thursday: “We will never leave this market unattended. I want the guys in the trading floors to be as jumpy as possible. I’m going to make sure whoever gambles on this market will be ouching like hell.”
At the same time, Brent was falling below $40 per barrel and the market continues to show signs of waning demand. OPEC and its allies said they would be “proactive and preemptive” in addressing the diminishing price, recommending “participating counties take further necessary measures”.
Abdulaziz started a meeting on Thursday with what Bloomberg called a “forceful condemnation” of members who are pumping out too much supply. His ire may have been directed to UAE Energy Minister Suhail al Mazrouei, who attended the meeting. The UAE has been “one of the worst quota breakers” in OPEC+, only making 10% of its pledged cuts for August.
Abdulaziz said: “Using tactics to over-produce and hide non-compliance have been tried many times in the past, and always end in failure. They achieve nothing and bring harm to our reputation and credibility.”
“Attempts to outsmart the market will not succeed and are counterproductive when we have the eyes, and the technology, of the world upon us,” Prince Abdulaziz continued.
UAE was overproducing by about 520,000 barrels per day in August and the country will try to make additional cuts in October and November to make up for past month shortcomings.
Countries like Iraq and Nigeria have implemented more than 100% of their required cuts, helping give OPEC and Abdulaziz credibility.
Harry Tchilinguirian, head of commodities strategy at BNP Paribas SA, concluded: ”You have to hand it to Prince Abdulaziz. Since he became Saudi oil minister, the kingdom has kept OPEC+ in line through his diplomatic and compelling powers of influence.”