Saudi Arabia will no longer “bear the burden of free riders” in the global oil market, Saudi Minister of Energy, Industry and Mineral Resources, Khalid Al-Falih, said Tuesday.
Since January, the Organization of the Petroleum Exporting Countries (OPEC) has lowered its production by 1.2 million barrels per day (mbpd) in a deal with non-OPEC nations.
The Kingdom, the biggest oil exporter in the world, has undertaken most of the supply cut.
“Saudi Arabia led by example by lowering its production below 10 mbpd, from our maximum capacity of 12.5 mbpd,” Al-Falih said, speaking at the IHS CERAWeek 2017 energy conference in Houston, Texas.
“We will not bear the burden for free riders this time. Saudi Arabia will not allow itself to be used by others. This is for the benefit of all,” he said.
The deal will end at the end of the first half of this year. The OPEC will meet in May to decide whether to extend it.
Al-Falih said the deal, in effect since the beginning of this year, was working well but a decrease of 1.2 mbpd didn’t amount to much given the market size — 95 mbpd of oil is produced globally.
“We are working with non-OPEC for a framework for the future … We will decide with our partners of what to do in the second half of the year,” the minister said.
He warned, however, that uncertainty would continue until the market comfortably absorbs marginal oil supplies from major non-OPEC productions, such as the US, Brazil, and Canada.
Al-Falih, who is also the Chairman of the Saudi oil firm Aramco, talked about the company’s initial public offering preparations expected sometime next year.
“Everything is green. It will be a great addition to global capital markets, and have a positive impact on global financial flows,” he said.
Referring to Aramco as “the world’s largest economic enterprise”, Al-Falih said: “We have been in oil industry for 80 years, and we will lead the global oil and gas industry for years to come.”
CERAWeek is one of the most prestigious energy conferences in the world.