Saudi Arabia denies political motives behind oil policy

Riyadh rejects criticism over its decision to let oil prices slide, saying drop is due to supply and demand factors.

    Rival oil-producing nations, such as Iran, accuse Saudi Arabia of using its oil policy as a political tool [EPA]
    Rival oil-producing nations, such as Iran, accuse Saudi Arabia of using its oil policy as a political tool [EPA]

    Saudi Arabia's OPEC governor Mohammed al-Madi said his country has no political motives in its oil policy, rejecting criticism over Riyadh's decision to let oil prices slide.

    Some producers say Riyadh declines to support the oil prices with an OPEC production cut in order to hinder other producers, such as Iran, a diplomatic rival of Saudi Arabia.

    "There isn't any political dimension in what we do at the oil ministry - our vision is commercial and economic," Madi told an energy conference in Riyadh on Sunday, according to the Reuters news agency.

    "We didn't mean to hurt anybody, our vision is simply the following: the producers which have low costs have to have the priority to produce, but those who have high costs have to wait for their turn to produce," he said.

    "We are not against anybody or against the [production of US shale oil] ... On the contrary we welcome it, as it balances the market in the long run."

    Madi said that the price drop was because of fundamental supply and demand factors, not any non-economic policies.

    "Was OPEC able to control prices? The answer is, if OPEC could have controlled the prices it would have done so, but it is not in the interest of OPEC to control the prices," the OPEC governor said.

    "It is OPEC's interest to achieve balance in the market. The price is decided by the market, and the market is subject to supply and demand."

    Madi also said that he believed it would be difficult for oil to reach a price range of $100-120 per barrel again. Brent crude is currently around $55 per barrel.

    "$100-120 - I think it's difficult to reach 120 another time...We understand that all countries need higher incomes...We want higher incomes, but we want higher incomes for us and future generations," Madi added.


    YOU MIGHT ALSO LIKE

    Interactive: How does your country vote at the UN?

    Interactive: How does your country vote at the UN?

    Explore how your country voted on global issues since 1946, as the world gears up for the 74th UN General Assembly.

    'We were forced out by the government soldiers'

    'We were forced out by the government soldiers'

    We dialled more than 35,000 random phone numbers to paint an accurate picture of displacement across South Sudan.

    Interactive: Plundering Cambodia's forests

    Interactive: Plundering Cambodia's forests

    Meet the man on a mission to take down Cambodia's timber tycoons and expose a rampant illegal cross-border trade.