Aramco’s Nasser says the oil market is closely balanced

By Maha El Dahan and Hadeel Al Sayegh

DUBAI (Reuters) – Aramco Chief Executive Amin Nasser said on Sunday the market would remain closely balanced in the short to medium term, adding he was cautiously optimistic.

Nasser spoke to the press after the Saudi oil giant reported its highest ever annual profit since the company went public.

He said spare capacity remained tight at 2 million barrels per day, while demand for jet fuel was rising alongside China’s reopening from tight coronavirus-related restrictions.

“If you considered the opening of China and an increase in jet fuels and very limited spare capacity, we are talking about 2 million barrels, so as I said we are cautiously optimistic in the short to medium term and the market will remain tightly balanced,” he said.

A deal agreed between Iran and Saudi Arabia on Friday to restore ties after years of hostility that had threatened stability and security in the Gulf would have a positive effect on global energy markets as it promotes regional stability, Nasser said .

The kingdom has blamed Iran for missile and drone attacks on its oil facilities in 2019, as well as attacks on tankers in Gulf waters. Iran has denied these accusations.

Aramco’s crude oil supplies to its main Asian customers, including China and India, were not affected by the increase in Russian sales to Asia on the back of Western sanctions.

“We have a track record of maintaining reliability and an excellent customer base. It did not affect our supply to these key markets,” he said.

On the recent import of Russian diesel to Saudi Arabia, Nasser said the kingdom had always imported products for its domestic market since before the Russian invasion of Ukraine.

Nasser said Aramco was looking globally at liquefied natural gas (LNG) market opportunities when asked about potential acquisitions in the coming year.

The company is in “active talks and discussions” regarding LNG investments, he said, without elaborating.

Nasser warned that he still did not see enough investment to sustain long-term demand in the sector, saying that supply would not be sufficient in the medium to long term if this trend continued.

“We need to ensure that there is additional supply in the market or this tightness in supply in the medium to long term will have an impact.”

(Reporting by Maha El Dahan and Hadeel Al Sayegh; Editing by Hugh Lawson)

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