Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman said the OPEC+ alliance has a role in “taming and containing” inflationary pressures, just hours after Brent crude surged back above $75 a barrel.
His remarks come as the 24-member OPEC+ group, led by Saudi Arabia and Russia, weigh whether to increase production further in the coming months, Bloomberg reported.
The oil cartel is scheduled to meet online next week to decide its production policy for August and beyond, after boosting output from May to July.
“We have also a role in taming and containing inflation, by making sure that this market doesn’t get out of hand,” the energy minister said Wednesday at a conference organized by Bank of America Corp.
However, he also cautioned that it was not clear whether oil prices were rising due to “real supply and demand” or because of “expectations and trajectories that are excessively optimistic.”
Moscow is considering making a proposal that the group should ease a global supply deficit by increasing output, Bloomberg quoted Russian officials familiar with the matter.
It expects a global supply shortfall to persist in the medium term, two officials said, asking not to be named because the discussions aren’t public.
The country’s final position going into the next OPEC+ gathering is still being shaped, another official said.
Other OPEC+ nations are also discussing a potential supply hike in August, although specific numbers haven’t been mentioned, said a delegate.
“Given the good sentiment and robust demand, OPEC+ is likely to find it easy next week to announce a further increase in production, at least for August, without jeopardizing the upswing enjoyed by the oil price,” Commerzbank analysts wrote.
Earlier this month, the International Energy Agency urged OPEC+ to start tapping its spare production capacity to bolster supply as demand rebounds.
Meanwhile, the Goldman Sachs Group Inc. estimates the market is running a deficit of three million barrels a day, citing a lack of meaningful output growth.
