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Prince Alwaleed bin Talal, has said that tolerating lower prices below $100 per barrel may be potentially “catastrophic” for Saudi’s economy, the Financial Times has reproted.
The statement was made in an open letter to ministers and was shared via Twitter and posted on the Prince’s website. The comments have widely been seen as an attack on Saudi Arabia’s oil minister Ali bin Ibrahim Al-Naimi. Prince Alwaleed bin Talal al-Saud expressed his “astonishment” at comments made by Saudi Arabia’s oil minister HE Ali al-Naimi, who reportedly played down the impact of oil prices falling below $100 a barrel.
Prices have since settled to $84 a barrel, after falling to a fresh 47-month low on Wednesday. Noting the kingdom’s 2014 budget was 90% dependent on oil revenues, Prince Alwaleed said belittling the impact of lower prices was a “catastrophe that cannot go unmentioned”.
Saudi Arabia is the world’s largest exporter and has the capacity to pump 12.5mn bpd, giving it tremendous power both within OPEC but also internationally as well. Reuters had earlier reported that Iran had rowed back on its earlier concerns over falling prices and was more willing to leave production unchanged at the next meeting of OPEC in Vienna on 27th November. Country members have also said it is unlikely that they convene prior to the meeting in Vienna to discuss options of arresting oil prices.
