Saudi energy minister expects fall in oil supply in two or three years

Saudi Arabia’s energy minister said on Thursday that he expects a fall in the global oil market in two or three years. Khalid Al-Falih made his comments on the fringe of the Atlantic Council Global Energy Forum in Abu Dhabi.

While predicting that the global demand for oil will grow by over 1 million barrels per day in 2017, Falih pointed out that the market is moving towards a balance between supply and demand. The agreement signed by OPEC and non-OPEC producers earlier in December to cut output will accelerate that process. The agreement is for six months but producers will discuss the possibility of extending it, he added.

Moreover, Saudi Deputy Crown Prince Mohammed Bin Salman announced last April that less than five per cent of the Saudi oil giant Aramco’s stock will be floated in the kingdom’s stock market. This is in addition to the establishment of an investment fund overseas which buys shares of the company on the local stock market.

He said that the estimated value of Aramco is around $2-2.5 trillion, adding that this will double the size of the Saudi stock market, particularly after the initial public offering (IPO) of its subsidiaries. The deputy crown prince pointed out that only one per cent of the company’s stock will still make it the largest IPO in the world.

From early last year, officials have been caught up on the intricate details of the IPO, including the legal requirements, how to evaluate Aramco’s assets and determining the markets in which they will be offered.