Prince Abdulaziz warns against OPEC+ complacency: 'Still too early to celebrate' on virus

Dubai — Oil traders should not try to predict future OPEC+ moves, and it is still too early to declare any victory against the pandemic, Saudi energy minister Prince Abdulaziz bin Salman said Feb. 17.

"We are in a much better place than we were a year ago, but I must warn, once again, against complacency. The uncertainty is very high, and we have to be extremely cautious. The scars from the events of last year should teach us caution," the prince said at the 11th IEA-IEF-OPEC Symposium on Energy Outlooks, broadcast online. "One of these lessons is the futility of trying to predict what is around the corner, and the best we can do is to increase our preparedness and resilience, realizing that collective action is the best way to tackle the challenges ahead."

Since the peak of the pandemic last year, the OPEC+ group has since tapered its historic production cuts, adding volumes that bring the alliance's total output rise close to 2 million b/d since May.

OPEC+ ministers are set to meet March 4 to decide on quotas for April and perhaps beyond, with Saudi Arabia having boosted the market by unilaterally cutting an extra 1 million b/d in February and March.

Delegates have told S&P Global Platts that quotas likely will be eased if current prices, which have reached a 13-month high in recent days, are sustained.

Prince Abdulaziz declined to signal what moves OPEC+ would make, saying it was using a strategy of "constructive ambiguity" to keep traders guessing.

"Don't try to predict the unpredictable," he warned.

OPEC Secretary General Mohammed Barkindo also urged caution in the oil market's outlook.

"While there is optimism that 2021 will be the year of recovery, there are many other uncertainties that lie ahead," he said at the same event.

Their comments came nearly a year after the alliance failed to agree on production cuts at a March 2020 meeting in the early days of the pandemic, resulting in a brief price war that cratered the market, before ministers regrouped to forge the current deal that imposed record cuts of 9.7 million b/d starting in May.

At an IEF event last February, Prince Abdulaziz sounded the alarm on the impact the pandemic would have on the oil markets, and called for the need to be vigilant and take action at the time.

He compared the market then to a "house on fire" that members could either choose to fight with a "garden hose or call out the fire brigade".

"The results since then demonstrate that Saudi Arabia's view to use professional firefighters was the correct one," he said, referring to the historic production cut agreement. "It took others a while to come round to this view, by which time we needed multiple fire brigades."