Saudi Arabia's Energy Minister: OPEC+ Capacity Deal Will Remain in Place Throughout 2023

Saudi Arabia's Energy Minister Prince Abdulaziz bin Salman said the OPEC+ alliance plans to stick to an oil deal reached at the end of 2022 for the rest of the year, reinforcing earlier signals from the group.

Last October, OPEC and its partners took the unusual step of setting a fixed production target for the full year ahead. Some key officials have said they intend to keep the quotas unchanged throughout 2023.

On February 14, the Saudi energy minister told Amrita Sen, director of research at Energy Aspects Ltd., in an interview in Riyadh, "The agreement we reached in October last year will remain in effect for the rest of this year." "You need to make sure that these positive signals in the market are sustainable."

Prior to the interview, published on the energy website, Prince Abdulaziz had said the bar for OPEC intervention would be high. Regarding the output adjustment, he said in Riyadh earlier this month, "When I see it, I will believe it and act on it."

Another key OPEC member, the United Arab Emirates, also said this week that there was little need for the group to change course. United Arab Emirates Energy Minister Suhail Al Mazrouei told reporters in Dubai that global oil supply and demand are balanced, inventories are ample, and crude oil price levels "prove the balance between supply and demand."

Goldman Sachs Group Inc. and the International Energy Agency (IEA) are among those predicting that if OPEC+ keeps output unchanged, the market will tighten sharply in the second half of the year, as China's recovery from the coronavirus lockdown spurs a recovery in fuel consumption.

Earlier this month, a key group of OPEC+ countries opted to leave output levels unchanged, pending another review in early April. The 23-nation coalition plans to hold a face-to-face meeting in Vienna in early June.