During a Future Investment Initiative conference held in Riyadh from 24 to 26 of October, Crown Prince Mohammed bin Salman of Saudi Arabia reiterated the Kingdom’s intent to honour agreements made with the Organisation of Petroleum Exporting Countries (OPEC), in which Saudi Arabia committed itself to cutting its oil production to balance the supply and demand of petroleum on the global market. OPEC will be holding its next meeting in the Austrian capital of Vienna at the end of November, where it will further discuss the current condition of the oil market.
Petroleum prices across the markets have plummeted in recent years due to a number of factors, such as the rise of green technologies in the west, a surplus of oil in the markets, and a loss of confidence in the oil production market. While this has been highly beneficial to those buying petroleum, it has crippled the finances of nations and industries dependent on its production and export. Notably, this has contributed to the deteriorating condition of the Venezuelan economy, which has traditionally based much of its economy on oil and gas exports.
Saudi Arabia, as one of the chief exporters of oil to the global market, has also been joined by Russia in its commitment to cutting oil production. Although not an OPEC member, Russia has agreed to reduce its production of oil by 1.8 million barrels to help reduce the surplus.
Speaking in Riyadh, the Crown Prince officiated the Saudi stance with a statement.
“The Kingdom affirms its readiness to extend the production cut agreement, which proved its feasibility by rebalancing supply and demand […] The journey towards restoring balance to markets, led by the Kingdom, is proving successful despite the challenges.”
His Royal Highness also spoke of his confidence that the price of oil will start to rise again soon thanks to the efforts of OPEC members, and that the future of all energy production — be it fossil-based or renewable — looks bright indeed. He also promised that in both areas, Saudi Arabia intends to lead the market.