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Saudi oil minister tells speculators to 'watch out' and blasts climate activists

Prince Abdulaziz bin Salman keeps Washington and oil market gamblers on edge ahead of Opec+ meeting
Saudi Arabia's Minister of Energy Abdulaziz bin Salman at the annual Future Investment Initiative conference in the Saudi capital Riyadh, on 25 October 2022 (AFP)

Saudi Arabia's Energy Minister Prince Abdulaziz bin Salman took aim at oil market speculators on Tuesday and mocked climate activists in a blistering speech that is likely to rile market watchers and policymakers in Washington.

“Speculators, like in any market, they are there to stay. I keep advising them that they will be ouching, they did ouch in April. I don't have to show my cards. I'm not a poker player... but I would just tell them to watch out," he said on Tuesday at the Qatar Economic Forum in Doha.

The comments aren’t the first time the kingdom’s outspoken oil minister has called out speculators looking to profit from price swings. In 2020, he famously vowed, “whoever gambles on this market will be ouching like hell”.

Saudi Arabia has scorched market gamblers and policymakers in Washington this year by leading fellow oil-producing states to make a series of surprise production cuts.

Saudi-led Opec and a group of other producers led by Russia agreed to cut two million barrels a day (bpd) of production in October, in a move that was slammed by the US as siding with Russia amid its invasion of Ukraine. Then in April, Riyadh corralled members of the Opec+ alliance to voluntarily cut an additional 1bpd.

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While both moves helped to briefly support prices, the international benchmark Brent has traded down since October. Brent was trading at $77.04 per barrel by 2:33 pm EST, while in October it was hovering above $90 a barrel.

On Tuesday, Abdulaziz took aim at US criticism of the kingdom’s oil policy without directly mentioning Washington, which called the April production cut “inadvisable”.

“We were, as Opec+, blamed in October, blamed in April. Who has the right numbers? Who gauged the situation in a much more, I would say, responsible way, but attentive way?” he said.

'Blue, green, purple, and pink hydrogen'

“I think over the last six-seven months we have proven to be a responsible regulatory institution,” he added.

Saudi Arabia has defended production cuts as necessary to support prices and drive future investment in fossil fuels to ensure supply.

“Look at where we are now: energy security is being shackled, running out of capacities because countries are not investing both in oil and gas,” Abdulaziz said.

"People go around talking about blue, green, purple, pink hydrogen, but in the final analysis, who is going to be the off-taker?" he said, referring to the proposed buyer.

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"What would be the price of hydrogen? We're not talking oil, we're not talking gas. We're talking about the so-called cleanest, greenest fuel of the future. And yet, you don't have the off-takers."

He was joined in taking aim at Europe and climate activists by Qatar's energy minister who warned Europe that the "worst is yet to come" for its oil and gas shortages and that a warm winter had lulled the West into a false sense of security as it looks to cut off purchases of Russian energy and transition to cleaner fuels. 

"The only thing that saved humanity and Europe this year was a warm winter, and the slowdown in the economy," Qatari Energy Minister Saad al-Kaabi told the Qatar Economic Forum.

"If the economy starts churning back up in (2024) and you have just a regular winter, I think the worst is yet to come."

'Opec+ vigilance' 

Gulf oil producers are concerned that global economic headwinds, including banking turmoil in the US and a slower-than-expected pandemic reopening in China, could also depress prices.

The energy minister’s comments are likely to keep speculators and policymakers in Washington on edge ahead of the Opec+ meeting on 3-4 June in Vienna, Austria.

“We have to be vigilant, we have to be proactive - as we in Opec+ have been saying for quite some time,” he said.

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If the cartel was to slash production again, it would come at a time when many are predicting an oil shortfall. The International Energy Agency warned last month that a Saudi-led cut in April would worsen a global oil deficit, driving inflation higher.

Saudi Arabia’s moves to shore up prices come as it looks to plow oil revenue into mega-projects like the $500bn city of Neom and a new airline intended to service an expanded capital.

The kingdom’s confidence trumpeting an energy policy that has been slammed in Washington also underlines its newfound independence as it sets itself up as a regional power in its own right.

After a series of deadly and costly interventions in wars like Yemen, Crown Prince Mohammed Bin Salman has positioned Riyadh in a mediator role in Sudan. Last week, he hosted Ukrainian President Volodymyr Zelensky and Syrian President Bashar al-Assad, a close ally of Vladimir Putin, during an Arab League Summit in Jeddah. 

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