London — Despite differing views on the pandemic, the OPEC+ alliance will continue to manage the oil market, Saudi energy minister Prince Abdulaziz bin Salman said Dec. 17.
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OPEC and its allies, led by Russia, have over the course of 2020 laid bare their opposing philosophies on how to deal with the coronavirus pandemic in a series of fractious meetings over production quotas.
Prince Abdulaziz said Saudi Arabia's preference is to remain proactive in cutting supply to stay ahead of any demand slumps, as the pandemic continues to rage in western countries.
However, other members, including Russia and the UAE, have been more eager to relax quotas to reclaim market share. At the coalition's last meeting Dec. 3, OPEC+ members agreed to raise collective output by about 500,000 b/d from January and to convene monthly to determine subsequent levels.
OPEC+ officials say that will enable the producers to stay nimble and react quickly to changing market conditions.
"We had a different point of view on the pandemic here in the kingdom," Prince Abdulaziz said. "At least in the energy sector, we believe in taking early measures to contain such matters. To take initiatives and to take early measures will have better results, rather than leaving matters until things become harder and the curing of such problems will be very costly."
The OPEC+ alliance will next meet Jan. 4.
Saudi Arabia, the world's largest crude exporter, saw its oil revenues plunge 30.7% in 2020 to Riyal 412 billion ($109.81 billion), its finance ministry said Dec. 15 in unveiling the budget, which slashed spending by about 7% from 2019 levels to try and reduce its deficit.
Market watchers view the budget as a marker the kingdom's oil price expectations, but officials declined to say what price target they are aiming for. Front-month ICE Brent futures were trading at $51.26/b at 1049 GMT.
"We don't target certain price levels," Prince Abdulaziz said. "We aim to stabilize the oil market [and] encourage investors to continue their investments through what they see are stable markets."
Analysts with Riyadh-based Al-Rajhi Capital said the Riyal 849 billion ($226 billion) revenue assumption in the budget appears "reasonable based on a Brent price of $48/b."