Saudi energy minister visits Russia, calls for stable energy sector
Saudi-Russia Energy Talks Amid Global Oil Market Turmoil
By Olesya Astakhova and Vladimir Soldatkin
Background: Oil Output Cuts and OPEC+ Challenges
ST PETERSBURG, June 4 (Reuters) - Saudi Arabia’s energy minister met his Russian counterpart on Thursday and called for stabilization in the energy sector, as the Iran and Ukraine wars cut oil output from the two top OPEC+ producers and send prices soaring.
OPEC+ is facing an unprecedented challenge in 2026 as the two wars force oil export cuts and render their output policy agreements symbolic. Added to that, the United Arab Emirates, an OPEC member for almost 60 years, shocked its fellow members in April by quitting the group.
OPEC+ Unity Displayed at St Petersburg Forum
But on Thursday, Saudi Energy Minister Prince Abdulaziz bin Salman and other top OPEC officials visited the St Petersburg International Economic Forum, Russia’s premier economic event, where relations between the OPEC+ kingpins looked on a solid footing despite the wider challenges and an uncertain outlook for demand.
Saudi Minister’s Call for Energy Security
“The situation we're going through now does make a point here, which is the world needs every molecule of energy, and every form of stabilization to this energy, because without energy security, you will lose sustainability,” the Saudi minister said.
“There are so many moving parts, there are so many unknowns, there are things that you think have become a reality, but then you wake up in the next morning and the reality is no longer a reality.”
OPEC+ groups 21 nations comprising the Organization of the Petroleum Exporting Countries, plus Russia and other allies.
OPEC+ Can Offset Global Changes in Energy Sector
The Saudi minister’s Russian counterpart, Deputy Prime Minister Alexander Novak, said the oil demand outlook was uncertain but OPEC+ was able to offset global changes in the energy sector.
Uncertainty in Oil Demand and Supply
"We came to the conclusion that no one really knows what to expect regarding demand at the moment. In other words, uncertainty has increased," Novak said after meeting the Saudi minister.
The U.S. and Israel's war with Iran, subsequent damage to Iran and its Gulf neighbours' oil infrastructure and the effective closure of the Strait of Hormuz shipping lane have caused the largest oil supply disruption in history.
"Estimates made just a few years ago now need to be fundamentally revised," Novak said.
Russian Oil Production and Ukraine Conflict
Russian oil production has fallen since the start of the year, Novak said, blaming the decline on unplanned maintenance at refineries. This was the first explicit acknowledgement by a Russian official of lower output.
Novak did not state the reason for the refinery maintenance, but Ukraine has intensified attacks on Russian refineries in recent months.
Another Symbolic OPEC+ Output Hike Expected
OPEC’s secretary general, Haitham Al Ghais, however, who was also attending the St Petersburg event, said the group expects robust oil demand growth and is not changing its estimates - which are at the higher end of the industry’s range.
Future Oil Demand and Investment
"We need to invest well ahead of time to be prepared for the demand that we see in the future," he said.
The Hormuz closure and subsequent forced cuts in oil exports by the Gulf OPEC members and former member the UAE has rendered their agreements to raise oil output quotas largely theoretical.
Upcoming OPEC+ Meeting and Output Targets
Nonetheless, Saudi Arabia, Russia and five other OPEC+ countries will likely agree a further hike in their output target for July when they meet on Sunday, sources have said.
(Reporting by Olesya Astakhova and Vladimir Soldatkin, Writing by Felix Light, Alessandra Prentice and Alex Lawler; Editing by Mark Trevelyan and Nick Zieminski)
