Copy of 2023-02-16T175725Z_403668219_RC2F8X9DN0W2_RTRMADP_3_SAUDI-ENERGY-OPEC-1676619316037
Saudi Arabia's Minister of Energy Prince Abdulaziz bin Salman Al-Saud Image Credit: REUTERS

Dubai: The OPEC+ alliance plans to stick with an oil deal agreed in late 2022 for the rest of the year, Saudi Arabia’s energy minister said, reinforcing earlier signals from the group.

In October, OPEC and its partners took the unusual step of assigning fixed production targets for a full year ahead. Key officials have indicated they intend to leave the quotas unchanged throughout 2023, and the comments from Prince Abdulaziz bin Salman are the most emphatic to date.

“The agreement that we struck in October is here to stay for the rest of the year, period,” the prince told Amrita Sen, director of research at Energy Aspects Ltd., during an interview in Riyadh on February 14. “You need to make sure that the emergence of these positive signals in the market can be sustained.”

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Prior to the interview “- which was posted on Energy Aspects’ website “- Prince Abdulaziz had already indicated that the bar for intervention by the Organization of Petroleum Exporting Countries will be high. He said earlier this month in Riyadh that “- with respect to production adjustments “- “I will believe it when I see it and then take action.”

The UAE, another key OPEC nation, also suggested this week that there is little need for the group to alter its course. Global oil supply and demand are evenly matched, with inventories comfortable and crude price levels “a testimony of the balance,” Energy Minister Suhail Al Mazrouei told Bloomberg TV in Dubai.

A key panel of OPEC+ nations opted to keep production levels unchanged earlier this month, and another review is due in early April.

Prominent oil industry voices such as Goldman Sachs Group Inc. and the International Energy Agency have predicted that markets will tighten significantly in the second half of the year if OPEC+ keeps production unchanged, as China’s emergence from years of Covid lockdowns spurs a recovery in fuel consumption.

 The full 23-country alliance is scheduled to hold an in-person meeting in Vienna at the beginning of June.