The Omani Minister of Energy and Minerals, Eng. Salem bin Nasser Al -Awfi, said that his country will not use oil as a weapon in political conflicts, stressing that the impact of its use of Arabs and Gulf people in the war on Gaza will be very limited.
Al -Awfi explained during the 14/4/1425 episode of the “concerned” podcasts, which is broadcast on the Atheer platform and presented by the media Khadija Bin Qena, that this limited influence of oil in political conflicts is due to the fact that the countries of the world currently produce about 100 million barrels per day, while the countries of OPEC Plus produce only about 30% of this global production.
The minister added -during the episode that can be followed from here, that the use of this weapon may create a kind of internal dispute in OPEC Plus and affect the foundations of the work for which it was established, noting that the position of oil exporting countries was also clear during the Russian -Ukrainian war not to use oil as a weapon of political influence.
In the same context, Al -Awfi revealed that 90% of the production of the Sultanate of Oman from oil goes – in one way or another – to China, which makes any decision to stop production not affecting the western side.
Regarding the regional situation, the Omani minister indicated that the impact of Houthi attacks on oil and ships in the Red Sea on Omani oil supplies is “very simple”, because “most of the Sultanate’s exports are heading to the east and go out directly to the Arabian Sea and then the Indian Ocean, they are far from Bab al -Mandab.”
Although he described these attacks as a source of concern, he stressed that its impact on global and Omani supplies at the present time is very limited.
On the relationship of the Sultanate of Oman with OPEC, Al -Awfi explained that his country is not a member of the organization, but it is within the OPEC Plus alliance, pointing to the gradual development in the production of the Sultanate.
In the beginnings, Oman was a very simple product, as its production did not exceed 500 thousand barrels per day, and then gradually rose to reach one million barrels at the present time.
The minister affirmed his country’s commitment to decisions to reduce the agreed production in OPEC Plus, explaining the existence of continuous monitoring from independent external institutions that follow up the production, in addition to an internal Gulf coordination regarding the voluntary decrease in production.
He said that Oman’s production capacity reaches about 1.2 million barrels per day, but due to the agreement with OPEC Plus, production was reduced by about 120 thousand barrels.
Regarding the Sultanate’s future energy strategy, Al -Awfi pointed out the need to invest in the field of renewable energy and hydrogen, explaining that his country directs investments towards renewable energy instead of increasing exploration and oil production “because the reality says that there is a transformation of energy.”
He stressed that the Sultanate of Oman is able to participate in this transformation, and that it has very great capabilities to produce renewable energy and then produce hydrogen and use it locally and export what exceeded the needs of the local market to global markets.
He stressed that this represents a parallel economy for the oil and gas economy, and that the Sultanate will continue to produce oil and gas as long as there is a demand in the local and global markets, but in parallel it will strongly pay in the economy of blue and green hydrogen and the economy of the renewable energy.
Stable expectations
With regard to the future of oil prices, the Omani minister expressed his belief that prices will not decrease to the expected levels (40-65 dollars) next year, indicating that the Sultanate’s budget is built on the basis of $ 60 a barrel.
He explained that the Ministry of Energy and Minerals does not look at prices on a daily basis, but rather focuses on its productive ability, and that its responsibility is to reduce the cost of production to the largest possible amount and continue to produce despite the fluctuations of prices.
In the event that prices drop, Al -Awfi referred to several options available to deal with this situation, including clouds from reserves, reducing expenses, and obtaining external financing until prices recover, or work to reduce the cost of production to increase the difference between price and cost, and this reflects an integrated strategy to deal with the fluctuations of the global oil market.
4/14/2025
