Saudi Energy Minister Prince Abdulaziz bin Salman has said a new deal between OPEC+ partners beyond 2022 would be agreed.
“The paper and physical markets have become increasingly more disconnected,” he said in response to written questions from Bloomberg News.
“Soon we will start working on a new agreement beyond 2022 which will build on our previous experiences, achievements, and successes,” he told Bloomberg.
“We are determined to make the new agreement more effective than before. Witnessing this recent harmful volatility disturb the basic functions of the market and undermine the stability of oil markets will only strengthen our resolve.”
The Organization of the Petroleum Exporting Countries and allies led by Russia, a group known as OPEC+, agreed to increase output by 648,000 bpd in each of July and August as they fully unwind nearly 10 million bpd of cuts implemented in May 2020 to counter the COVID-19 pandemic.
The group agreed earlier this month to raise production quotas by another 100,000 bpd in September.
“Without sufficient liquidity, markets can’t reflect the realities of the physical fundamentals in a meaningful way and can give a false sense of security at times when spare capacity is severely limited and the risk of severe disruptions remains high,” the minister said.