Saudi Arabia Says Will Not Sell Oil to Any Country That Imposes Price Cap on Its Supply

Energy Minister: Kingdom Embarked on Expanding Production Capacity to 13.3M b/d by 2027

Saudi Energy Minister Prince Abdulaziz bin Salman  -(File/AFP)
Saudi Energy Minister Prince Abdulaziz bin Salman -(File/AFP)
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Saudi Arabia Says Will Not Sell Oil to Any Country That Imposes Price Cap on Its Supply

Saudi Energy Minister Prince Abdulaziz bin Salman  -(File/AFP)
Saudi Energy Minister Prince Abdulaziz bin Salman -(File/AFP)

Saudi Energy Minister Prince Abdulaziz bin Salman said on Tuesday that the Kingdom will not sell oil to any country that attempts to impose a price cap on its supplies, stressing that the Kingdom has embarked on expanding its capacity to 13.3 million b/d by 2027.

Prince Abdulaziz made his remarks in an interview with "Energy Intelligence", during which he stressed that there are many factors influencing market sentiment, adding that the global economy is forecasted to continue growing this year and next year.

"But there is still uncertainty around the pace of growth," he noted, also citing that China has just started to rebound after extended Covid lockdowns.

"But the duration for recovery is still unclear."

The Prince said that economic recovery is generating inflationary pressures, which could prompt central banks to intensify efforts to tame inflation, stressin that "interplay" of these and other factors limits clarity, and the sensible and only course of action in such an uncertain environment is "to maintain the agreement we struck last October for the rest of this year and that is what we intend to do. We need to ascertain that the positive indicators are sustainable."

"There are those who continue to think that we would adjust the agreement before the end of year. For those I say they need to wait until Friday, Dec. 29, 2023 to demonstrate to them our commitment to the current agreement," the Energy Minister noted.

Asked about the Nopec bill, Prince Abdulaziz pointed to the difference between Nopec legislation and extending the price cap, saying, however, that their potential impacts on the oil market are similar as such policies add new layers of risk and uncertainty "at a time when clarity and stability are most needed."

"I must reiterate the view I made on record back in August and September on how such policies would inevitably exacerbate market instability and volatility, and would negatively impact the oil industry. In contrast, Opec-plus has made every effort and succeeded in bringing significant stability and transparency to the oil market, especially compared to all other commodity markets."

According to the Saudi Energy Minister, the Nopec bill does not recognize the importance of holding spare capacity and the consequences of not holding spare capacity on market stability, and it would also undermine investments in oil capacity and will cause global supply to fall severely short of future demand.

"The impacts will be felt all over the world on producers and consumers alike, as well as on the oil industry."

"The same holds for price caps, whether imposed on a country or a group of countries, on oil or any other commodity. This will lead to individual or collective counter-responses with intolerable consequences in the form of massive volatility and instability. So if a price cap were to be imposed on Saudi oil exports, we will not sell oil to any country that imposes a price cap on our supply, and we will reduce oil production, and I would not be surprised if others do the same," he added.

Concerning global spare capacity, Prince Abdulaziz affirmed that both spare capacity and global emergency stocks are the ultimate safety net for the oil market in face of potential shocks, saying he repeatedly warned that global demand growth will outpace current global spare capacity, while emergency reserves are at a historic low.

"That is why it is crucial that policies are put in place to support investments needed to increase spare capacity in a timely manner, and that global emergency stocks are maintained at an adequate and comfortable level."

Prince Abdulaziz revealed that the Kingdom of Saudi Arabia has proactively embarked on expanding the capacity to 13.3 million b/d by 2027, stressing that the expansion is "already under way in the engineering phase and the first increment is expected to come onstream in 2025."



China's Xi Holds Rare Meeting with Business Leaders amid Slowing Economy, US Tensions

01 February 2025, Indonesia, Bandung: In this photo illustration, China Artificial Intelligence Deepseek Website and logo is displayed on a smartphone with Flag Of China in the background. Photo: Algi Febri Sugita/ZUMA Press Wire/dpa
01 February 2025, Indonesia, Bandung: In this photo illustration, China Artificial Intelligence Deepseek Website and logo is displayed on a smartphone with Flag Of China in the background. Photo: Algi Febri Sugita/ZUMA Press Wire/dpa
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China's Xi Holds Rare Meeting with Business Leaders amid Slowing Economy, US Tensions

01 February 2025, Indonesia, Bandung: In this photo illustration, China Artificial Intelligence Deepseek Website and logo is displayed on a smartphone with Flag Of China in the background. Photo: Algi Febri Sugita/ZUMA Press Wire/dpa
01 February 2025, Indonesia, Bandung: In this photo illustration, China Artificial Intelligence Deepseek Website and logo is displayed on a smartphone with Flag Of China in the background. Photo: Algi Febri Sugita/ZUMA Press Wire/dpa

Chinese President Xi Jinping held a rare meeting on Monday with some of the biggest names in China's technology sector, including Alibaba founder Jack Ma, in what sources previously billed as an effort to boost private-business sentiment.

The meeting highlights a turnaround in Beijing's approach to its tech giants after a regulatory clampdown a few years ago, as well as more recent concerns about a slowdown in economic growth and efforts by the US to stunt its technological development, Reuters reported.

Liang Wenfeng, founder of DeepSeek, a startup that is threatening to upset the technology world order with its AI models, also attended, two sources familiar with the meeting said.
Liang was not pictured in CCTV's video, and DeepSeek did not immediately respond to a Reuters request for comment.
Other private business leaders who attended the symposium included Huawei founder Ren Zhengfei, Xiaomi's Lei Jun, BYD's Wang Chuanfu, Unitree's Wang Xingxing, and CATL's Robin Zeng, a video published by CCTV showed.
The meeting was also attended by Meituan's Wang Xing, China Feihe's Leng Youbin and Will Semiconductor founder Yu Renrong, the video showed.
Tencent's Pony Ma was there too, a source familiar with the matter said, declining to be named as the meeting details were not public. Tencent did not immediately respond to a request for comment.
Xi delivered a speech after listening to representatives of private companies, official news agency Xinhua said. The report did not provide any details about the symposium, held in the Great Hall of the People in Beijing.
Reuters reported on Friday, citing sources, Xi planned to chair a symposium to boost private sector sentiment on Monday that would be attended by the country's business leaders, including Alibaba co-founder Jack Ma.
The symposium would be aimed at boosting private-sector sentiment, and Xi was expected to encourage company chiefs to expand their businesses domestically and internationally amid an intensifying China-US technology war, the sources had said.
Investors on Monday were scouring pictures and footage of the meeting to spot top bosses and trading accordingly, with Baidu shares down more than 8% - the largest loser on the Hang Seng index - after no top executive was spotted.
Founders of Baidu and Bytedance were among the prominent private business leaders in China who did not attend the meeting, two sources familiar with the matter. Neither company immediately responded to requests for comment.
The presence of top executives and companies at these high-profile events are typically seen by foreign investors as a sign of the businesses or individuals that are favored by the government.
ACHIEVING SELF-SUFFICIENCY
The meeting took place against the backdrop of US tariffs threatening to pile more pressure on the world's second-largest economy, which has been reeling from weak domestic consumption and a destabilizing debt crisis in the property sector.
The private business sector contributes more than 50% to China’s tax revenue, more than 60% of its economic output, 70% of tech innovation and 80% of urban employment, according to official estimates.
The meeting also comes as global excitement over DeepSeek's AI platform has spilled over into investor speculation about its potential positive effects on China's broader tech sector, and has triggered calls for an upward repricing of Chinese assets.
Xi has long stressed the need for China to achieve self-sufficiency in semiconductors and wants the country to use AI to drive economic development.
But China's efforts have been hampered by export control measures on chips imposed by Washington which is worried Beijing could use advanced semiconductors to boost its military capabilities.
"It's a tacit acknowledgement that the Chinese government needs private-sector firms for its tech rivalry with the US," said Christopher Beddor, deputy China research director at Gavekal Dragonomics in Hong Kong.
"The government has no choice but to support them if it wants to compete with the US."
'POTENTIAL RISKS'
Tech shares in Hong Kong have roared higher in recent weeks on a combination of optimism about the DeepSeek AI breakthrough and a thawing of authorities' approach to internet giants.
The Hang Seng technology index hit a three-year high in morning trade on Monday, having rallied on Friday after Reuters reported Xi was to chair Monday's symposium. It slipped in volatile afternoon trade and was last down 1.3%.
Xi first chaired a high-profile symposium for the private sector in 2018, six years after he came to power. At the time, he pledged tax cuts and a level playing field while reaffirming that private firms would have access to financial backing.
"Despite the rising opportunities in the case of DeepSeek, it is also about guiding the private sector in the government-led direction and containing the potential risks to compete with the US," said Gary Ng, senior economist at Natixis.
"Still, the regulatory environment is the black box. As most AI development happens in the private sector, we cannot entirely rule out the outcome of a tighter-than-market-expected regulatory environment than we see now."
Attendance by Jack Ma, in particular, has the potential to boost business confidence, analysts have said.
The once high-profile entrepreneur largely withdrew from public life after the IPO of his fintech company Ant was halted by authorities in 2020 – a move triggered by a speech he gave that year criticizing China's regulatory system.
His business empire and the wider technology industry were then targeted by a regulatory crackdown, with his time out of the limelight symbolizing a reversal of fortunes for China's private sector.