Minister of Petroleum and Mineral Resources Ali Al-Naimi was honored last night by the New York Stock Exchange (NYSE) for his role in the oil sector, and the Kingdom praised for its efforts to stabilize the global oil market.
In his address to NYSE, Minister Al-Naimi reviewed the changes that have molded the oil sector into its current shape, including the establishment of the Organization of Petroleum Exporting Countries (OPEC) in the 1960s, and in the 1970s, the process of transfer of control of oil production, distribution and pricing from the multinational companies to the countries that produce the oil. The International Atomic Energy Agency (IAEA), he said, was established as a reaction to OPEC on the part of the consuming countries.
Minister Al-Naimi spoke of the Iranian revolution and the Iraq-Iran war, and the resultant temporary decrease in oil supplies; and of the fact that oil is a major source of income not only for the producers, but also for the consumers, because of taxes imposed on petroleum products by the consuming countries. He went on to point out that the war to liberate Kuwait obligated the Kingdom, and all the oil-producing countries, to maintain market stability. Turning to environmental issues, he spoke of the challenge to the producing countries to make high-quality petroleum products that meet the needs of developing economies while minimizing their harmful effects on the environment.
Reiterating the Kingdom's concern to provide the market with sufficient supplies while keeping prices at the desired level of between U.S. $25 and $28 per barrel, Minister Al-Naimi also talked about the importance for the oil producers of price transparency, and their efforts to limit risks through maintaining price stability; there is, however, no price system that is free of shortcomings.
Minister Al-Naimi declared that the Kingdom is proud of its outstanding record as a reliable supplier of oil. In order to secured balance and stability in oil prices, he said, Saudi Arabia retains an excess production capacity that enables it to overcome major increases in prices in the event of interruption of oil supply, as happened following the invasion of Kuwait by Iraq. Stressing that crude oil will remain the major fuel for economic development in the foreseeable future, he urged continued dialogue between the producers and consumers in the interests of securing price stability.