Saudi Arabia, Russia should weigh oil agreement effects: IEA chief

Saudi Arabia and Russia should take into consideration the consequences of their alliance on oil production levels, Arab News quoted the executive director of International Energy Agency as saying.

“It is very important to see the consequences of such agreements, not only in the very near term, but also in the medium term. This is important, to make those agreements according to the entire picture,” Fatih Birol said on the sidelines of the CERAWeek by IHS Markit energy forum in Houston, Texas.

Birol pointed out that he was not advising Saudi Arabia and Russia on the future path of their oil alliance, saying that was an issue for the policymakers of the two biggest oil exporters.

When asked what Saudi Arabia and Russia should do in the face of increasing US oil production, to the extent that the US will overtake Russia and rival Saudi Arabia as an oil exporter in the next five years, he said both countries should continue their efforts to diversify away from oil dependency.

“Saudi Arabia has all the means to be able do that. There have been some successful steps in recent times, like the petrochemical industry and putting more emphasis on natural gas. But there are also some non-energy steps that need to be part of the game, like a broader economic diversification,” Birol added.