Saudi Arabia is the world’s real swing oil producer, not the US and its shale drillers, as the kingdom can start and stop production quick enough to respond to demand, John Hess, CEO of American oil company Hess Corp. was quoted as saying by Reuters.
"A swing producer means that virtually at the flip of a switch, you can go up several hundred thousand barrels per day or down several hundred thousand barrels per day," he said.
Speaking on the sidelines of the IHS CERAWeek conference in Houston, Hess described oil production in the US as short-cycle, and unable to adjust to market conditions immediately.
His comments came as the global oil market is struggling with prices well below $35 a barrel (bbl), compared to more than $110/bbl in mid-2014.
Many industry players in the US blame OPEC and Saudi Arabia for the current oil slump, as the cartel has maintained its policy of boosting output to defend market share.
Harold Hamm, billionaire and chief executive of Hess’s rival Continental Resources has been one of the biggest critics of the Saudi-led output policy, and has said in the past that it had created a “predatory” pricing environment. He also famously called Saudi Arabia the "toothless tiger" and suggested the country's influence on global markets was diminishing.
Earlier on Tuesday, the kingdom’s oil minister Ali Al-Naimi said during the same conference that his country would not make any production cuts, but instead focus on finalizing a deal with major producers on freezing output at January levels.
“We are doing what every other industry representative in this room is doing. We are responding to challenging market conditions and seeking the best possible outcome in a highly competitive environment,” Al-Naimi said.
Comments
{{DisplayName}}
{{ElapsedTime}}