Opec+ is a club of 23 oil-producing nations that decides how much crude oil to sell on the global market.
“We see demand growing at a rate of about 2.4 million barrels per day,” Haitham Al Ghais told the BBC.
Saudi Arabia stated it would reduce crude oil production by a million barrels per day to support prices.
According to the International Energy Agency (IEA), Saudi Arabia and Russia’s plan to cut production – two major oil producers and members of Opec+ – might result in a “significant supply shortfall” by the end of this year.
“This is a voluntary decision taken by two sovereign nations, Saudi Arabia and Russia,” Mr Al Ghais added. Because of the uncertainty, this decision can be defined as precautionary or pre-emptive.”
Oil prices skyrocketed following Russia’s invasion of Ukraine in February 2022, reaching at over $120 per barrel in June last year. They fell back to a little more than $70 a barrel in May of this year, but have steadily risen since then as producers tried to limit supply to support the market.
Brent crude, a pricing benchmark, exceeded $95 per barrel on Tuesday on forecasts of reduced supply, raising fears that the price could breach $100 per barrel. The increase prompted a warning to drivers that fuel costs could grow in the next 10 months, and it fueled fears that important economies’ inflation could be protracted.
Mr Al Ghais, on the other hand, stated that Opec was more concerned about “underinvestment” in the oil sector.
