Saudi Arabia: "No Impact from Russian Crude Oil Price Cap... Future Outcomes Uncertain"

"The system created for political purposes is not clearly able to achieve its goals"

Abdulaziz bin Salman, Saudi Arabia's Minister of Energy [Photo by AFP Yonhap News]

[Asia Economy Reporter Lee Ji-eun] Saudi Arabia stated that the recently introduced price cap on Russian crude oil by the West has not yet shown any impact.

On the 11th (local time), according to major foreign media, Abdulaziz bin Salman, Saudi Arabia's Minister of Energy and leader of the Organization of the Petroleum Exporting Countries (OPEC), said regarding the West's introduction of the Russian crude oil price cap, "(These measures) have not brought any clear results." He added, "Since the measures were implemented only recently, the future we see is full of uncertainty," and "It is not clear whether a system created for political purposes can achieve its intended goals."

The Group of Seven (G7), Australia, and the 27 countries of the European Union (EU) have limited the price of Russian crude oil to below $60 per barrel since the 5th as a sanction against Russia's invasion of Ukraine.

Minister Abdulaziz stated that considering the situation in the international crude oil market, Russia's response to Western sanctions and its subsequent countermeasures must be taken into account together. He also noted that considering recent circumstances, the production cut decision made by the major oil-producing countries' coalition, 'OPEC Plus (OPEC+),' including Saudi Arabia and Russia, has been proven to be the right choice. He emphasized that production policies will continue to focus on market stability for the next year.

At the regular meeting in October, OPEC+ agreed to reduce daily crude oil production by 2 million barrels starting in November and maintain this level until the end of next year. OPEC+ judged that production cuts were inevitable due to falling oil prices since October caused by China's and the global economy's slowdown, interest rate hikes, and reduced oil demand due to worsening economic outlooks.

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