Weak global economy cause of oil 'tensions': Saudi crown prince

Weak global economy cause of oil 'tensions': Saudi crown prince

Tuesday, January 6, 2015 10:10 pm

A weak global economy is the main reason for “tensions” in world oil markets, Saudi Arabia’s crown prince said Tuesday, in a speech on behalf of ailing King Abdullah.

Prince Salman also indirectly touched on the violence ravaging Syria and neighbouring Iraq, saying Saudi Arabia remains “an oasis of peace” despite turmoil around it.

Saudi Arabia's King Abdullah : ailing king

Saudi Arabia’s King Abdullah : ailing king

“You are aware of the urgent tensions taking place in the international oil market, caused by a number of factors, foremost the weak global economic growth,” the prince said in address to the Shura Council, an appointed body that advises the monarch.

“This development is not new in the oil market, and the kingdom has in the past dealt with it firmly and wisely,” he said, adding that Saudi Arabia will maintain its “same approach” towards the market.

The speech would have been given by King Abdullah, aged about 90, but he has been hospitalised since last week with pneumonia.

Global crude prices fell about 50 percent in 2014, mostly since June, and the rout has continued into the new year.

The benchmark US oil price fell below the psychological $50 a barrel level Tuesday for a second day.

Economic growth remains uncertain in Europe and in many emerging economies including China and Brazil.

Along with worries about global demand, analysts have also blamed a strong dollar and a supply glut for oil’s price fall.

Saudi Arabia is the major producer among the Organisation of the Petroleum Exporting Countries (OPEC) cartel, which decided in November to leave crude output unchanged, further pressuring prices.

Oil Minister Ali al-Naimi has been quoted as saying it is unfair to expect the cartel to reduce output if non-members, who account for most of the world’s crude production, do not follow suit.

– ‘Unprecedented’ regional challenges –

The royal court announced Friday that Abdullah had pneumonia but was in stable condition and breathing with the aid of a tube.

He was admitted to the King Abdulaziz Medical City in Riyadh on December 31 for checks.

Salman said he wished that “God will grant the king a speedy recovery.”

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