The OPEC+ group should not be complacent about the impact of the coronavirus outbreak on oil demand, Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman told reporters on Tuesday, a day after oil prices tanked on renewed concern that the outbreak may not be contained in the coming days.
Earlier this month, the energy minister of OPEC’s top producer reportedly compared the coronavirus impact on demand to a “house on fire,” Bloomberg reported last week, quoting anonymous sources who had heard the minister’s comments at an event closed to the press. When your house is on fire, “you can either treat it with a garden hose and risk losing the building, or call the fire brigade,” the minister reportedly said.
On Tuesday, the Saudi energy minister sought to reassure the market with comments to reporters that the oil producing countries are in constant communication to discuss how to respond to the slump in demand.
“We did not run out of ideas, we haven’t lost our phones and there are always good ways of communicating through conference calls and technology is very helpful,” Prince Abdulaziz bin Salman said, as carried by CNBC.
Russia—which hasn’t officially announced yet its position on potentially deeper cuts—is “positively engaged,” the Saudi minister said today, referring to last week’s comments of Russian Energy Minister Alexander Novak that Moscow continues to hold talks with its partners in OPEC about the situation on the oil market.
Answering a question about a potential fracture in the OPEC-Russia oil alliance, Prince Abdulaziz bin Salman told CNBC:
“I’m confident of our partnership as OPEC+, I’m confident that everyone in the OPEC+ is a responsible and responsive producer.”
OPEC and its non-OPEC allies led by Russia are meeting in Vienna next week to discuss a potential response to the demand destruction caused by the coronavirus outbreak.