King Says Saudi Arabia To Deal With Weak Oil Challenge With ‘Firm Will’

Saudi Arabia’s King Abdullah said on Tuesday the world’s top oil exporter would deal “with a firm will” with the challenge posed by lower oil prices in a speech read on his behalf by Crown Prince Salman and broadcast on state television.

“You cannot be blind to the tensions in the global oil markets … these are not new developments and we have dealt with it in the past with a firm will and wisdom … and we will deal with the new developments in the same vein,” he said.

ICE Brent crude futures were down to $51.78 a barrel on Tuesday after closing at $53.11 on Monday, down 54 per cent since a 2014 peak on June 19 of $115.06 a barrel.

He said lower prices were caused by many factors, of which the most important was weakness in the global economy, and said that Saudi Arabia had faced similar market conditions before.

Saudi Arabia said last month it would not cut output to prop up oil markets even if non-OPEC nations did so, leading to criticism from some other members of the group of producers who want Riyadh to act to defend prices.

The kingdom issued an expansionary 2015 budget late last month that anticipated a deficit and Finance Minister Ibrahim Alassaf said in a pre-budget statement the kingdom could handle lower oil prices thanks to its high level of reserves.