Speaking on the sidelines of the International Energy Forum, a gathering of oil producers and consumers, Saudi Oil Minister Khalid al-Falih said the OPEC kingpin is trying to ensure that there is a close match of supply and demand "so that markets are not worried about gluts and over-supply and continued investment will flow into the industry."
He said since 2013-14, a rapid drop in investment in oil exploration and production has been witnessed which "will ultimately bite the customers and the industry as a whole" as the addition of no new production would create shortages.
Asked about Saudi Arabia and Russia looking to extending a short-term pact to curb oil supplies with a view to check prices, he said, "We believe that whatever we are doing is part of long-term responsibility".
Saudi Arabia was "extremely concerned" when oil approached USD 150 a barrel in 2007 as they ultimately crash due to over-supply and reduction in demand. Vice versa is also true as when rates, investment stop, and oil production capacity rapidly declines, resulting in a squeeze and imbalance and prices spike up. "As a result consumers are hurt in long term."
"What we are trying to do is not move prices to any unreasonable levels. What we are trying to do is (that) supply and demand are closely matched so that markets are not worried about gluts and over-supply and continued investment will flow into the industry," he told reporters here.
Russia, not a member of the OPEC, has worked alongside the 14-member group since January 2017 after a crash in crude prices, to control supplies and boost prices.
"We are trying to signal to markets, to investors, to the financial community, to international companies to put investments back in upstream," he said. "As much as we are sympathetic with the price pinching... I am concerned that investments in upstream are not flowing because of the uncertainty. We are tyring to signal to all the stakeholders that there will be certainly and that we will not sit by and let another glut re-surface in the coming year and bring the market.
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