Saudi Oil Minister's msg24 Feb 2016 12:08
Note from, His Excellency Ali Al-Naimi, Minister of Petroleum & Mineral Resources, Kingdom of Saudi Arabia Houston, Texas, 23 February, 2016.
“Ladies and gentlemen, I am here today to set out why we as an industry have more that unites us than divides us. And I will highlight a challenge that confronts us all in the coming years and decades. My remarks will cover three main areas. The international oil market, Saudi Arabia’s oil policy in these challenging times, and the impact of climate change.
First, some context. I joined Aramco as an office boy in 1947. During my seven decades in the industry, I’ve seen oil at under $2 a barrel and at $147, and much volatility in between….. These experiences have taught me that this business, and this commodity, like all commodities, is inevitably cyclical. Demand rises and falls. Supply rises and falls. Prices rise and fall.
When oil was up around $100, the price seemed reasonable. But, historically, it was very high.
The fact is that demand was, and remains, strong. You can argue over small percentage falls or rises, but the bottom line is that the world demands, and gets, more than 90m barrels per day of oil. Long-term, this will increase. So I have no concerns about demand, and that’s why I welcome new, additional supplies, including shale oil.
Anything we can do to make downward cycles shorter and less extreme is beneficial. This includes seeking to allow markets to work with a minimum of meddling. We are hopeful that the nimbleness and responsiveness demonstrated by shale oil producers will continue. These supplies may be needed quickly once markets balance and tighten.
If and when the market goes awry, governments and industry need to find ways to work together to help it rebalance. We should allow markets to work, but we must also remain vigilant. We must seek to better understand changing market dynamics, and be ready to act when market failures and extreme volatility occur.
Ladies and gentlemen. This brings me to a brief overview of Saudi Arabia’s oil policy in these challenging times. First, we remain committed to meeting the demands of our customers. Second, we invest vast sums to retain our vital spare capacity to help meet additional demand or address global supply disruptions should the need arise. As such, we continue to communicate with all major producers in an effort to lessen volatility. We seek consensus and remain open to cooperative action. And lastly, we remain committed to supplying a large portion of the world’s energy demands on purely commercial terms. We’re not chasing a greater market share.
Ladies and gentlemen. To sum up. This business is cyclical. We are in a painful downturn, but the market will rebalance and demand will pick up. I remain optimistic. We must continue to work together and we must stick together if we want to achieve our common goal of supplying energy for the betterment of the world and h
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