Since 20 14, the international crude oil market has not brought good news. After Saudi Arabia increased production and depressed the price of crude oil, the fiscal deficit of this country, which relies heavily on oil revenue, has never been absent, and the crown prince's "Vision 2030" economic reform plan is also consuming a lot of foreign exchange reserves, although it seems that there is a lot of stock; However, after Saudi Arabia led the Organization of Petroleum Exporting Countries to reach a crude oil production reduction agreement with Russia and other countries, polar bears did not honestly fulfill the agreement, but gradually eroded Saudi Arabia's share in the European crude oil market. In fact, no country in the world can know exactly how much oil it produces every day, and the gradual recovery of oil prices has also greatly increased the shale oil production in the United States, eventually making the United States the country with the largest crude oil production on the planet.
Less than five months after his appointment as Saudi Energy Minister, Prince Abdul bin Salman has become one of the most influential international figures, especially after he led the giant Saudi Aramco to set off a global oil price storm. At the OPEC+meeting on the 6th of last month, Russia resolutely refused to cut production, and the Organization of Petroleum Exporting Countries led by Saudi Arabia was unwilling to take action without Russia's participation, so the meeting ended hastily. Saudi Aramco immediately announced that it would reduce the official selling price of Arabian light crude oil for Asian customers by $6 per barrel, the biggest monthly decline since 2003, while the official selling price of Arabian light crude oil for northwest Europe was reduced by $8 per barrel. This is no longer a contest between Saudi Arabia and Russia, but a comprehensive declaration of war by Saudi Arabia against all oil-producing countries in the world. Prince Abdulaziz wants to tell them that whoever is the world's largest oil exporter and has the largest crude oil production capacity will have the final decision on the direction of the crude oil market and energy strategy in the coming decades.
In this decisive battle of fate, Saudi Arabia and Prince Abdulaziz, who is in charge of Saudi energy industry, have almost no retreat. If we make concessions in the face of Russia, the United States or any other country, it means that Saudi Arabia has given up its leading position in the international energy market and even lost its leading position in the Organization of Petroleum Exporting Countries, and this country has almost collapsed. Founded in 1965, the oil exporting countries are the tools for Iran, Iraq, Kuwait, Saudi Arabia and Venezuela to confront the seven multinational oil companies led by Britain and the United States. For example, Iraq is busy dealing with the epidemic, Venezuela has huge reserves but no mining capacity, and Kuwait and those countries that have joined one after another are limited in scale, not counting senior program hosts like Qatar and Indonesia DC, which was originally the mainstay of Saudi Arabia.
Prince Abdulaziz played an important role in this sudden and unexpected battle. This is not only because he is the son of the current Saudi King Salman, but also because he is one of the top energy experts in Saudi Arabia and even the world, and has worked in Saudi oil information and decision-making departments for 35 years. Abdul Aziz received his bachelor's degree and master's degree in industrial management from King Fahd University of Petroleum and Minerals in 1985, and served as the director of the center in charge of energy research in the university. During the tenure of Ali Naimeh, the former oil minister and known as the "oil czar", he was appointed as the assistant to the oil minister until he served as the deputy minister of energy and minerals in 20 15.
Prince Abdulaziz spent almost all his career in the corridors of the Saudi Ministry of Energy, which is not common among the core members of the Saudi royal family. They usually have a good education abroad, and prefer to show their eloquence to the Ministry of Foreign Affairs and the Ministry of National Defense, or directly use their rights held in their hands from the cradle to turn themselves into business giants. Compared with this, the work of the Department of Energy was too unpretentious and boring, but the prince persisted. Decades of experience in the oil and energy industry made him almost the only suitable candidate after the dismissal of former energy minister Halid Falih.
Even the son of the current king, even after a long period of accumulation, Prince Abdulaziz's position as energy minister is not easy at all. As the first member of the royal family to serve as the Minister of Energy in Saudi history, he faces too many unresolved issues. The dispute between the two giants, Saudi Arabia and Russia, on the production reduction agreement at the Vienna meeting in early March was only a straw to crush the camel, or even the last one. After the international oil price plummeted in the middle of 20 14, Saudi Arabia insisted that the Organization of Petroleum Exporting Countries beat all high-cost crude oil miners by increasing production. Of course, the main target is heavily indebted American shale oil companies. However, due to the different positions within the Organization of Petroleum Exporting Countries (OPEC) and the oil price dropped to $27 per barrel in 20 16, Saudi Arabia is doomed to be unable to bear this burden alone.
The royal family in the desert decided to turn to hunters in extremely cold places. This is an alliance with different intentions. On the one hand, it is a member of1/organization of petroleum exporting countries headed by Saudi Arabia, and on the other hand, it is a non-OPEC oil producer headed by Russia. In 20 16, the two countries completed a hasty meeting in Algiers, the capital of Algeria, with the goal of bringing the international oil price, which had fallen to 29 dollars/barrel at the beginning of the year, back to life. By jointly reducing crude oil production and increasing strategic reserves, the economies of various countries gradually recovered in the process of slowly rising oil prices, and shale oil producers on the other side of the ocean began to stir. However, Saudi Arabia insists that it is itself that gains the least, because it is only itself that keeps its promise as simple and honest as a camel, and the giants in the north not only make small moves behind the scenes, but even bother to talk about the agreement on the table.
It's time for a showdown. When the share of OPEC oil-producing countries in the global crude oil supply fell to the lowest level in history, Prince Abdulaziz was determined to change this reality and take immediate action. After the production reduction agreement broke down, Saudi Aramco used its huge extra capacity to quickly increase the crude oil supply to120,000 barrels per day, and the export volume increased to about 9.7 million barrels per day. A few days later, it was announced that the strategic reserve would be used to increase the supply to12.3 million barrels per day and the maximum sustainable production capacity to1300,000 barrels per day. The oil trading company confirmed that Saudi Aramco has rented almost all the tankers that can be rented to transport oil to all parts of the world. The black liquid of Zahoual, the world's largest onshore oil field, and Safania, the world's largest offshore oil field, will almost flood the whole earth. The Saudis are using such actions to show that Riyadh will solve the world crude oil production and price problems at all costs if the opponents do not give in and confirm that they will not negotiate on production reduction.
In fact, Prince Abdulaziz began to prepare for this war more than ten years ago, if he could have foreseen such a war. The preparatory work has reached its peak in the past few years. In 20 17, Saudi Arabia announced that it would invest 50 billion dollars to build 30 wind farms and solar power stations in 10. It is planned to generate 3.45 GW of renewable energy in 2020, accounting for 4% of the country's total power generation, and further increase to 9.5 GW in 2023, accounting for 10% of the country's total power generation. 20 19 In June, Saudi Arabia announced that it had received plans from the United States, Russia, France, South Korea and China to build the first nuclear reactor in Saudi Arabia, and Saudi Arabia planned to build 16 such nuclear reactors. More importantly, from 2065438 to February 2009, Saudi Arabia launched the world's largest shale gas project outside the United States. Saudi Aramco announced the invention of an effective method to extract shale gas from seawater, thus overcoming the problem of water shortage in the desert. At the same time, the exploitation of natural gas fields in Saudi Arabia began to accelerate gradually. All these are weapons in the hands of Prince Abdulaziz and Saudi Arabia.
Although it seems that starting a war in the crude oil market made the prince play a disgraceful role, it did not affect the evaluation of Saudi energy minister by those energy tycoons. Charles Freeman, the former American ambassador to Saudi Arabia, said that Prince Abdulaziz represented a new phenomenon, namely Saudi Arabia's "royal technocrat". He commented that the prince is a "world-class expert" of the Saudi Ministry of Energy. Bassam Fatouh, director of the Energy Research Institute of Oxford University, said that since Saudi Arabia implemented the renewable energy reform, Prince Abdulaziz has been a key figure in Saudi Arabia's energy policy, and gary ross, founder and CEO of Black Gold Investment Company, even thought that "no one in Saudi Arabia knows the oil industry better than Prince Abdulaziz". There seems to be some deliberate compliments in these people's comments, because they must all know what will happen to the world economy if the traders in the global crude oil price storm get angry.