Saudi Efforts to Protect Oil Producers from Shrinking Global Economic Growth

An Aramco facility (Asharq Al-Awsat)
An Aramco facility (Asharq Al-Awsat)
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Saudi Efforts to Protect Oil Producers from Shrinking Global Economic Growth

An Aramco facility (Asharq Al-Awsat)
An Aramco facility (Asharq Al-Awsat)

The Saudi government's voluntarily reducing its output to nine million barrels per day (bpd) represents significant to support the global market and protect producers and consumers, economic analysts told Asharq Al-Awsat.

The experts emphasized the importance of a unified OPEC+ decision and the voluntary production decline in line with the capabilities of many oil-producing countries.

- Market protection

Advisor and international law professor Osama al-Obaidi told Asharq Al-Awsat that the decision of the OPEC+ group seeks to protect price stability from severe fluctuations that harm producers and consumers alike.

Obaidi said the decision limits the contraction of global economic growth, noting that the extreme price fluctuation leads to a decline in oil production efficiency and consumption.

The expert noted that OPEC+ countries needed to defend their market share and achieve stability.

- Global Economy

Obaidi said that the OPEC+ policy, led by Saudi Arabia, balanced international markets and enhanced the stability of the global economy.

Saudi Arabia's efforts are essential to eliminate extreme fluctuations in the oil market to prevent a decline in global demand and support market stability and balance, said Obaidi.

He indicated that the Kingdom, with its voluntary reduction with the member states of OPEC+, succeeded in reducing price fluctuations and ensured the availability of sufficient supplies to global markets.

- Distributive justice

Economist Fahd bin Jumaa noted that appointing impartial bodies to monitor OPEC+ production is an advanced and unprecedented step that achieves fair distribution of production lines and determines the reduction transparently.

Bin Juma told Asharq Al-Awsat that Saudi Arabia's reduction of its production by one million bpd starting next July confirms the correct outlook for global markets to maintain oil stability.

- Precautionary efforts

An official source in the Saudi Ministry of Energy said that after the OPEC+ meeting, the Kingdom would implement an additional voluntary cut in its crude oil production, amounting to one million bpd, starting in July for a month that can be extended.

The Saudi production will become nine million bpd, and the Kingdom's total voluntary cut will be 1.5 million bpd.

The source explained that the Kingdom's additional voluntary cut reinforces the precautionary efforts made by OPEC Plus countries to support the stability and balance of oil markets.

In addition to extending the existing OPEC+ cuts of 3.66 million bpd, the group also agreed to reduce overall production targets from January 2024 by a further 1.4 million bpd versus current targets to a combined 40.46 million bpd.



US Energy Secretary Says Riyadh and Washington to Sign Civil Nuclear Agreement

US Energy Secretary Chris Wright speaks at the press conference in the Saudi capital Riyadh. Photo: Turki al-Aqaili
US Energy Secretary Chris Wright speaks at the press conference in the Saudi capital Riyadh. Photo: Turki al-Aqaili
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US Energy Secretary Says Riyadh and Washington to Sign Civil Nuclear Agreement

US Energy Secretary Chris Wright speaks at the press conference in the Saudi capital Riyadh. Photo: Turki al-Aqaili
US Energy Secretary Chris Wright speaks at the press conference in the Saudi capital Riyadh. Photo: Turki al-Aqaili

The United States and Saudi Arabia will sign a preliminary agreement on energy cooperation and civilian nuclear technology, US Energy Secretary Chris Wright said on Sunday.

Wright spoke at a press conference in the Saudi capital Riyadh where he arrived from the United Arab Emirates on Saturday as part of a regional tour that will also take him to Qatar.

His visit comes amid world economic turmoil over the tariffs imposed by US President Donald Trump. But Wright said that these tariffs don’t seek to restrict trade, rather they aim for fair and reciprocal trade.

His visit also comes ahead of an expected visit by Trump to the Kingdom, the UAE and Qatar in May to consolidate relations.

The US Energy Secretary told journalists at the Saudi Energy Ministry that Riyadh and Washington were on a "pathway" to reaching an agreement to work together to better develop energy resources and energy infrastructure, in addition to mining cooperation, civilian nuclear technology and energy production.

Wright said further details over a memorandum detailing the energy cooperation between Riyadh and Washington would come later this year.

Saudi Minister of Energy Prince Abdulaziz bin Salman announced last September that the Kingdom is working to develop peaceful uses for nuclear energy across various fields.

In his press conference on Sunday, Wright discussed the meetings he has held in Riyadh. There have “been very wide ranging dialogues for a day and a half now and they're going to continue. We've talked about energy in all aspects of energy. We've talked about mining, critical materials. We've talked about processing in industry. We've talked about climate change. We've talked about human lives and what drives their improvement and how best to achieve those ends,” he said.

On Saturday, Prince Abdulaziz met with Wright at King Abdullah Petroleum Studies and Research Center (KAPSARC) where the US official was briefed on the Center's role in the fields of energy policy research and its transitions, climate change, sustainable transportation, and consultancy services, in addition to the development of models and analytical tools that contribute to finding solutions to current challenges in the energy sector. They also discussed opportunities for cooperation in energy research, exchange of expertise, and strengthening joint research efforts.

Wright said Sunday that he believed “Saudi Arabia will be one of the leading countries in investing in the United States. I think that's a win for the Kingdom here. It's a win for the United States. And for us, most importantly, it's a win for the working class and American citizens to have better job opportunities.”

He added that the “broader objectives” of the US and Saudi Arabia “are prosperity at home and peace abroad.”

Wright also said in response to a question by Asharq Al-Awsat that tariffs are part of Trump's economic agenda.

He said Trump is trying to grow the flow of goods outside the United States into other countries while sustaining imports and engagement with countries from around the world. “So that's a way you could describe this. Fair trade, not restricted trade, just fair trade, reciprocal trade.”

He added that the United States has seen a lot of its intensive industries, particularly energy, move outside of the country and be outsourced somewhere else. “Too many Americans have seen their job opportunities shift overseas.”

“So tariffs are also a way to give a nudge and encourage investment into our country, to make products in our country, to grow economic opportunity and prosperity in America.”