A weak global economy is the main reason for “tensions” in world oil markets, Saudi Arabia’s crown prince said on Tuesday, in a speech on behalf of Saudi Arabia’s ailing King Abdullah.
“You are aware of the tensions taking place in the international oil market, caused by a number of factors, (amongst which) foremost is the weak global economic growth,” Crown Prince Salman said in an annual address to the Shura Council, an appointed body which 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 in the speech on behalf of King Abdullah who has been hospitalized with pneumonia.
Salman, who is next in line to the throne, said the kingdom will maintain its “same approach” towards the oil market.
Global crude prices fell about 50 percent in 2014, mostly since June, and the rout has continued into 2015.
Prices on Monday fell below the $50 a barrel mark, helping to drag the Euro to a nearly nine-year low against the US dollar while stocks fell around the world.
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 the fall in oil prices.
Saudi Arabia is the major producer among the Organisation of the Petroleum Exporting Countries (OPEC) cartel, which in November decided to leave crude output unchanged, further pressuring prices.
Saudi Oil Minister Ali al Naimi has been quoted as saying that 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.
The one resource from gulf countires and the world does not need it with other substitutes moving in.
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