Although the oil market is now in better shape than it was in 2016, there are concerns about the tight spare oil production capacity, Saudi Arabia’s Energy Minister Khalid al-Falih told Reuters on Monday.
“We are concerned about tight spare capacity nowadays,” al-Falih told Reuters after meeting with the Japanese trade minister in Tokyo, adding that OPEC and its non-OPEC partners in the production cut deal would discuss the spare production capacity at the summit in Vienna in June.
According to the International Energy Agency (IEA), within OPEC, more than 2 million bpd of spare capacity is held in Saudi Arabia.
“But we feel the industry is in better shape than when we started in 2016, and although we are seeing that improvement, we certainly don’t feel we are where we need to be with complete market stability,” the energy minister of OPEC’s largest producer and de facto leader told Reuters.
Al-Falih reiterated his previous comments that Saudi Arabia doesn’t see yet the ‘mission accomplished’, despite the fact that the global oil oversupply in developed nations has dropped very close to the five-year average—OPEC’s current metric to measure the success of the production cuts.
“We have to be patient. We shouldn’t jump the gun, we shouldn’t be complacent and listen to some of the noise such as ‘mission accomplished’. I think we still have work ahead of us.”
Speaking to Reuters today, al-Falih once again dismissed reports that Saudi Arabia was targeting a specific price of oil, after reports that it is shooting for $80 or even $100 oil.
“For sure we are not targeting a price. Our objective all along has been to bring stability, rebalancing and equilibrium back to the oil markets,” al-Falih told Reuters.