Saudi Energy Minister Abdulaziz bin Salman said during the Robin Hood Investors Conference held on Wednesday that a new giant cycle in global oil prices may result from the lack of new investments in exploration.
The Saudi minister, who had been warning speculators about the dangers of bearish bets, added that his job was to prevent such a super-cycle.
In light of this, Bloomberg Agency said that the Saudi minister's statements are an attempt by him to communicate directly with "Wall Street" and speak to an audience of hedge funds, which is a rare step.
The kingdom's former oil ministers tended to have closed-door discussions with market players such as commodity hedge funds.
“I think my job and those of others are to make sure that this super-cycle does not happen,” Abdulaziz bin Salman said, also warning of the danger of a super-cycle due to a “lack of investment” in the oil sector.
After successive oil crises, some oil producers and exploration companies cut their drilling budgets to preserve liquidity and avoid a new oversupply.
The minister fears the cuts may have gone too far and lead to a squeeze in crude supplies as demand picks up.
Brent crude futures are up 43% so far this year and are on track for their strongest annual performance in half a decade as economies emerge from pandemic lockdowns and major exporters exercise restraint in raising oil production.
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