Saudi Arabia's Energy Minister Prince Abdulaziz bin Salman attends the opening ceremony of the 24th World Energy Congress in the UAE capital Abu Dhabi. Picture: KARIM SAHIB / AFPSaudi Arabia’s new energy minister, Prince Abdulaziz bin Salman, faces a series of fairly bleak options as the world’s largest exporter of crude oil tries to engineer higher prices amid a faltering global economy beset with geopolitical risks.
But Abdulaziz will know, as a highly experienced energy leader, that the current policies aren't exactly working, and worse than that, have very little chance of delivering the higher prices his country needs. While crude prices did gain in the months after the initial action by Opec and its allies, they only briefly managed to top $80 a barrel in October 2018, plunged to just above $50 by the end of 2018 before recovering to about $75, and meandering to the current level of $62.08 for benchmark Brent futures.
This means that where some US shale and Canadian oil sands producers used to need prices above $70 a barrel to incentivise new production, they can now bring new crude to the market at much lower prices. Saudi Arabia's seaborne exports of crude have been below seven-million barrels per day since February, and were at 6.58-million bpd in July, according to Refinitiv Oil Research.
Of course, there is no guarantee that crude prices would hold at about $50 a barrel if the Saudis raised exports, as presumably other producers in the current output deal would also feel they could ramp up their shipments too.
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