His Royal Highness Prince Abdulaziz bin Salman, the Saudi Minister of Energy, affirmed that the recent agreement of the “OPEC+” alliance represents a strategic turning point, as it establishes a new mechanism that rewards countries that invest in their production capacity and believe in future demand growth, thus strengthening the Kingdom of Saudi Arabia’s position at the forefront of global energy producers.
Historical background and context of the OPEC+ agreement
This agreement comes within the framework of ongoing efforts by the OPEC+ alliance, established in 2016, which includes members of the Organization of the Petroleum Exporting Countries (OPEC) and key non-OPEC producers, most notably Russia. The alliance's primary objective is to stabilize global oil markets by collectively managing production levels. It has proven effective in addressing major challenges, such as the collapse in global demand during the COVID-19 pandemic, where historic production cuts helped prevent price collapses and support the global economy. The new agreement builds on this legacy, emphasizing transparency and long-term investment to ensure security of supply.
The importance and impact of the new mechanism
Prince Abdulaziz bin Salman explained that the new mechanism adopted is the most transparent in the organization's history for determining baseline production levels for each country. He noted that "what was achieved yesterday at the OPEC+ meetings represents a turning point and one of the most successful days of my career." This mechanism not only aims to manage the market in the short term but also encourages member countries to invest in energy sector infrastructure to ensure their ability to meet increasing demand, especially given the decline in global investments in hydrocarbon fuels. His Highness added, "We will be present when the world acknowledges that its previous rhetoric about energy will pale in comparison to the reality of consumption.".
Local and international impact of the agreement
Domestically, this agreement reinforces Saudi Arabia’s leading role as a reliable and pivotal producer in the global energy market, aligning with the goals of Vision 2030, which relies on stable oil revenues to finance economic diversification projects. Internationally, a clear and stable mechanism provides greater certainty to global markets, helping to curb extreme price volatility that harms both producers and consumers. Furthermore, stable energy prices are crucial for controlling global inflation and supporting sustainable economic growth.
Strengthening Saudi-Russian cooperation
These statements coincided with the launch of the Saudi-Russian Investment and Business Forum in Riyadh, which aims to deepen the economic partnership between the two countries. The Minister of Energy indicated that Saudi Arabia and Russia would sign an agreement for mutual visa exemption, in addition to a new agreement for cooperation on environmental and climate issues. This bilateral cooperation, led by Prince Abdulaziz bin Salman and Russian Deputy Prime Minister Alexander Novak, reflects the strength of the strategic relationship that forms the cornerstone of the OPEC+ alliance and its success in managing energy markets.
