Oman energy minister sees oil prices coming down after winter

Oman’s energy minister Salim Al Aufi said on Tuesday he saw oil prices coming down from the range of $90 a barrel after the winter season.

“We don’t believe that the current prices are sustainable comfortably,” he told Reuters on the sidelines of the COP27 climate conference in Egypt’s coastal city of Sharm El Sheikh.

“We believe after the winter season they will go down ... We think it will go to a much more comfortable position in the 70s,” he said.

Aufi said Oman set the oil price for its budget at $55 a barrel to create an extra cushion for debt payments but that he did not think prices would go down that much.

“We do have a lot of debt to pay so if we budget at $55, anything above a $55 price will go towards paying the debt,” he said.

Aufi also said the upcoming Opec+ meeting on December 4 in Vienna would largely be driven by the messaging out of Europe on its economic outlook.

If Europe’s message was that it still expected a recession and higher interest rates, Opec would again consider the question “do we have oversupply,” he said.

Aufi said he had not seen any data yet and that Opec+ could move either way, depending on whether the group believed the market was over-supplied.

At its October 5 meeting, the Opec+ grouping of Opec members and allies including Russia, agreed a 2 million barrel per day (bpd) output cut that triggered a war of words with some in the West, with the US administration calling it “shortsighted”.

Opec+ producers have rallied around top oil exporter Saudi Arabia after Washington accused it of pushing some members into the cut.

The unprecedented move aims to prevent Russia from profiting from a surge in prices fuelled by the Ukraine crisis while ensuring that most of Russian oil keeps reaching global energy markets.