- Oil prices have soared past $110 a barrel since Russia’s invasion of Ukraine led to an energy crisis.
- Saudi Arabia’s foreign minister told the World Economic Forum that it won’t take any further action to calm markets.
- “The kingdom has done what it can,” Prince Faisal bin Farhan said at a panel in Davos.
Saudi Arabia is unlikely to take any further action to contain oil price rises, according to the country’s foreign minister.
“As far as we are aware there is no shortfall of oil,” Prince Faisal bin Farhan told the World Economic Forum at Davos on Tuesday. “The kingdom has done what it can.”
Saudi Arabia is the world’s largest crude oil exporter, according to the International Energy Agency. In March, the IEA drew up a 10-point plan to release more oil from stocks in an attempt to curb soaring prices.
Russia is one of the world’s largest oil producers and its invasion of Ukraine has led to an energy crisis. Crude prices are up nearly 70% over the past year and have risen 20% past $110 a barrel since Russia’s assault began.
“Our assessment is that actually oil supply right now is relatively in balance,” Prince Faisal said.
“It’s much more complex than just bringing barrels to the market,” he added — seemingly implying that Saudi Arabia would release no further oil supplies.
Oil price surges have contributed to rising US inflation, which hit 8.3% in April. The IEA’s executive director has also warned that a summer spike could trigger a global recession.
“This summer will be difficult because in summer, as we know, the oil demand normally goes up in peak driving season,” Fatih Birol told Bloomberg TV on Monday. Birol also said that “everybody in the global energy markets” needs to do what they can to keep a lid on energy prices.
But Prince Faisal argued that the solution to soaring energy prices is further investment in refineries, rather than increased supply.
“The problem is refined products, which is something that is more connected to a lack of investment over the last year-and-a-half [to] two years in refining capacity.”
Saudi Arabia is the effective leader of the Organization of the Petroleum Exporting Countries. The group, together with partner countries such as Russia, Oman and Kazakhstan, have, since April 2020, jointly restrained crude output in response to the drop-off in demand from the coronavirus crisis. That deal expires in three months.