2004 Transcript

Foreign Affairs Advisor discusses oil on Fox TV

Crown Prince Abdullah's Foreign Affairs Advisor Adel Al-Jubeir was interviewed by Brenda Butler on Fox TV's 'Your World With Neil Cavuto' on August 11, 2004, concerning the statement by Oil Minister Ali Al-Naimi on increased oil production.

Brenda Butler: thanks for joining us. Saudi Arabia has pledged to increase oil production, and we dough now to Jeddah, Saudi Arabia where I'm joined by foreign affairs advisor Adel Al-Jubeir to talk about the breaking development. Thanks for joining us.

Al-Jubeir: My pleasure.

Butler: Sir, do you expect to increase output? I believe by 1.3 Million barrels a day? Will that be immediate?

Al-Jubeir: We can do that immediately, depending on what our customers want.

Butler: Well, clearly, there is the demand out there. Oil prices have been rising daily to record highs. So why wait?

Al-Jubeir: Well, Brenda -- Brenda, we have indicated to our customers in may that we could increase production up to ten-and-a-half million barrels a day if that is what they require we won't turn anyone back, we'll produce whatever is required and our customers have not taken advantage of this situation. When we indicated today that we are ready to increase production by an additional 1.3 Million barrels, we really haven't seen an increase in demand by our clients. We believe the reason we have had prices -- high prices now is because of factors having nothing do with supply-demand, people are concerned about the situation in Iraq and concerned about the situation with Yukos in Russia, concerned about possible instability in Venezuela, and as a consequence you have massive speculation by hedge funds which are driving prices high.

Butler: Those are clearly factors and you have great insight into that issue, sir but it really comes down to demand and supply in some case, I mean, demand is at its highest level in a generation and we are not pumping out enough oil. Were you surprised when you made the pledge today, and oil prices went higher, even so? Does that show that you don't have as much influence over oil prices as you once had?

Al-Jubeir: No, I believe what this shows is that the markets are adequately supplied and that it is other factors that are driving the price higher, as I mentioned, we were ready to produce more oil and make it available to our customers, months ago but had no takers.

Butler: Perhaps, OPEC just isn't the force in the oil markets as it once was, then?

Al-Jubeir: I think that there is fear about the situation in Iraq. About problems elsewhere in the world. What we are seeing now actually is inventory levels going up gradually which means there is actually an oversupply of crude oil. But, that still is not deterring the speculators from going long on oil, in -- speculators. And driving prices up.

Butler: Thank you very much, sir, appreciate your help. Foreign affairs advisor Adel Al-Jubeir