Western policies on Russian crude risk creating great uncertainty at a time when clarity is most needed, says Saudi oil minister
Saudi Energy Minister Prince Abdulaziz bin Salman has warned Western states against capping the price of crude oil supplied by the kingdom, adding that any attempt to impose a cap would be met with a halt in sales and production cuts.
He added that other major oil producers would most likely follow suit.
“So if a price cap were to be imposed on Saudi oil exports, we will not sell oil to any country that imposes a price cap on our supply, and we will reduce oil production, and I would not be surprised if others did the same,” bin Salman said in an interview with Energy Intelligence on Tuesday.
According to the minister, price cap policies will inevitably exacerbate market instability and volatility and have a negative impact on the entire oil industry across the globe.
He compared the oil price cap with the US proposal to pass the so-called NOPEC legislation, pointing out that the potential impact of such measures on the oil market is similar. The NOPEC (No Oil Producing and Exporting Cartels Act) would allow OPEC and national oil companies to be sued under US antitrust law for anti-competitive attempts to limit global oil supply and the subsequent impact on crude prices.
In December, the EU, G7 countries and their allies introduced a collective ban on Russian oil exports by sea, along with a price cap of $60 a barrel. Another embargo banning almost all imports of Russian petroleum products, as well as the introduction of price caps on diesel and other petroleum products, came into force on February 5.
Moscow has opposed any attempt to cap the price of its energy exports. The Russian authorities have banned all oil transactions under the price cap system. In February, Russia announced plans to voluntarily cut oil production in March by 500,000 barrels a day by halting sales to buyers who meet a Western-imposed price cap.
According to the Saudi oil minister, the policies pursued by the West add “new layers of risk and uncertainty” to the world oil market “at a time when clarity and stability are most needed.”
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