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 give a comfortable cushion to pay its debt 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 Dec. 4 OPEC+ meeting in Vienna would largely be driven by the messaging out of Europe on whether the continent was going into a recession or not.
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 Oct. 5 meeting the OPEC + alliance, which groups OPEC and its 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 U.S. administration calling it “shortsighted”.
OPEC+ producers have rallied around top oil exporter and de facto OPEC leader Saudi Arabia after Washington accused it of pushing some members into the cut.