Amin Al-Nasser, President and CEO of Saudi Aramco, said during an energy forum in London today, Tuesday, that the oil market is not focused on the fact that global excess production capacity to increase oil production is too low.
He added, “The market is focused on what will happen to demand if there is a recession in different parts of the world, they are not focusing on the fundamentals of supply.”
He added that spare capacity amounts to 1.5 percent of global demand, and that having excess production capacity is not the responsibility of Saudi Arabia alone.
The CEO of Aramco stressed his confidence in the company’s ability to maintain its market in Asia despite European demand, as the Asian market accounts for 60% of its shipments. Stressing that he does not see more competition for Russian oil in Asia.
He also pointed out that Europe’s problem lies in Gas and liquefied gas due to the lack of spare capacity. He added that European refiners are avoiding Russian oil, forcing Moscow to take advantage of alternative markets in Asia, most notably China and India.
Tomorrow, Wednesday, the OPEC + alliance will hold its first meeting in person in Vienna, since March of the year 2020, amid expectations that the alliance will tend to reduce production by at least 500,000 barrels per day, while some expectations indicate the possibility of reducing by more than one million barrels per day.
In the event that a production cut of one million barrels per day is approved, it will be the largest reduction since the start of the Corona pandemic, and it will reflect the extent of concern about the slowing global economy.