Zhongtong Finance learned from Abdulaziz bin Salman, the Saudi energy minister, on Thursday that if the market weakens, OPEC+ can suspend or reverse oil production growth. He also added that he disagrees with Goldman Sachs' view that the latest OPEC+ resolution will be bearish for oil prices.

At the OPEC+ ministerial meeting on June 2, the organization agreed to extend the daily production cut plan of 3.66 million barrels per day by one year until the end of 2025 (previously scheduled to expire at the end of 2024). At the same time, the voluntary production cut plan of 2.2 million barrels per day implemented by 8 OPEC+ member countries, including Saudi Arabia, the UAE, and Iraq, will be extended until the end of September this year (previously scheduled to expire at the end of June this year). From October 2024 to September 2025, 8 key OPEC+ member countries can gradually exit the daily production cut plan of 2.2 million barrels per day.

In addition, OPEC+ expects global oil demand to increase by 2.2 million barrels per day this year. The organization will also raise the UAE's official production quota by 300,000 barrels per day. That is, the production quota will be raised from the current 2.9 million barrels per day to 3.519 million barrels per day by September 2025, and will be implemented from January 2025.

Goldman Sachs believes that the result of the OPEC+ meeting is unfavorable to crude oil product prices, and Brent crude oil may fall below the range of $75-90 per barrel. The bank said: "Although the clear production cut plan further reduces the possibility of all-out price wars and supports the view that oil prices will stabilize within a certain range, the risks of this range are obviously biased downward at present."

Goldman Sachs believes that the production cuts in OPEC+ are not enough to ease the oversupply situation of crude oil products. The eight OPEC+ member countries, including Saudi Arabia, the United Arab Emirates, and Iraq, may gradually increase production before the end of 2025. In addition, the bank expects global oil demand to increase by 1.5 million barrels per day this year, far below the expectations of OPEC+.

Abdulaziz bin Salman stated that if OPEC+ thinks the market is not strong enough, it can suspend or reverse production growth. He said that this is a one-and-a-half-year agreement with all the mechanisms in place, some of which are not new and have been implemented before, especially the issue of suspension or reversal. He was referring to OPEC+'s practice of suspending the release of more oil. In addition, he said that Goldman Sachs used incorrect data to reach conclusions, but did not specify which data was incorrect.

Russian Deputy Prime Minister Alexander Novak said that the decision on June 2 was very appropriate and "guided us in the right direction", and that if necessary, OPEC+ may adjust the agreement and said that "we are ready to respond quickly to market uncertainties". He added that the subsequent drop in oil prices was due to misunderstandings of the agreement and speculative factors.

Haitham Al-Ghais, the Secretary-General of OPEC, pointed out that due to the rebound in tourism demand, oil demand is strong. In addition, he said he did not understand why some people criticized the agreement. He said, "For some time, we have been hearing and seeing a demand for a clearly defined roadmap for production adjustments, how these adjustments will be gradually canceled or reduced. When we provide this, it becomes confusing and negative. So, sometimes it's really hard to understand."