Nations shouldn’t use emergency oil reserves to manipulate prices, Saudi Arabia’s energy chief warned.
“Losing emergency stocks may be painful in the months to come,” Saudi’s energy minister said.
The comments come as the US has released millions of barrels from strategic reserves in 2022.
Saudi Arabia’s energy chief Prince Abdulaziz bin Salman blasted nations’ use of emergency oil reserves to manipulate prices, warning of more pain for energy markets in the event of future shortages.
The comments come as President Biden has signed off on historic use of the US Strategic Petroleum Reserve this year, releasing 180 million barrels of oil since April, with another release of 14 million barrels announced this month. While the excess supply helped keep a lid on energy inflation, it’s putting oil markets under pressures, Energy Aspects’ Amrita Sen said last week, as that’s “not what [the reserves are] meant to be used for.”
Emergency supplies are now dwindling, with the SPR seeing its lowest levels of oil since 1984, Forbes reported in September. The releases could also lead to supply shortages in the future, Saudi’s energy chief warned.
“It is my profound duty to make clear to the world that losing emergency stocks may be painful in the months to come,” the prince said at a conference on Tuesday, per Reuters.
That comes as Saudi Arabia and other oil producing countries plan to pull back on oil production. OPEC+ announced it would slash oil production by 2 million barrels a day starting November, despite Biden’s plea to ramp up production to tame energy prices.
But, those cuts are necessary to address price distortions in the energy market, OPEC+ officials say. And despite accusations that Saudi Arabia was choosing to side with Putin in his energy war on the world, the nation was choosing to be “the maturer” party in its rift with the US, the prince added.
Other nations have rallyed to Saudi Arabia’s defense. Turkey’s foreign minister US leaders to stop “bullying” Saudi Arabia for the production cut, and Indonesia’s finance minister said the West’s economic actions on Russia, such as the price cap plan for Russian oil, were creating uncertainty told for commodity exporters, which likely influenced the production cut in the first place.
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