Saudi Oil Minister to CNBC: We Will Protect Supply
By: Patrick Allen | CNBC EMEA Head of News
Saudi Arabia will not allow any supply disruptions from the Middle East to impact global supplies of oil, the oil-rich country's deputy oil minister told CNBC Tuesday.
"The market knows that Saudi has a good chunky excess capacity and a record of using it when needed," Prince Abdulaziz bin Salman Al Saud said in an interview.
"There is no qualms, what needs to prevail is no shortage of supply," said the prince, who is hosting a meeting of ministers from the world's major oil producers.
Prince Abdulaziz bin Salman said investors should not panic, likening the current situation to being inside a burning house.
"Investors should not react to the risk premium. In a fire in a house, panic leads to disaster. You need to get hold of yourself and think rationally and get to safety," he said.
The prince added that he hoped the situation in the wider region will calm down but expects jitters in oil, foreign exchange and even stock markets given all the uncertainty.
"We hope the situation will subside," he said.
Saudi Will Be Different
Like many of its neighbors, Saudi Arabia has high unemployment, particularly young unemployed people, but there are key differences with Northern Africa, according to John Sfakianakis, the chief economist at Banque Saudi Fransi in Riyadh.
"Saudi and much of the Gulf is better equipped to deal with unrest than Egypt or Libya. With huge oil reserves they are able to trickle money down to the population," he said.
"Huge amounts of money are being spent on education. There are now 24 universities with 100,000 young people studying and helping to turn Saudi into a knowledge- based economy," Sfakianakis added.
"People have TVs, they see events happening around the region and are concerned but there is a different set up here. This is also true of Kuwait, the UAE and places like Qatar," Sfakianakis said.