Saudi Arabia gave the clearest signal yet of its concerns about the impact of the coronavirus on oil markets, comparing the situation to a blaze that needs the fire brigade.
In his first public comments on the virus since January, when he said the epidemic would have a “very limited impact” on oil demand, Saudi Energy Minister Prince Abdulaziz bin Salman described more urgent circumstances to an audience in Riyadh on Wednesday.
When asked about the impact of the coronavirus on oil, the prince equated it with a burning house, according to people who heard the comments, but asked not to be named because the event was closed to the press. You can either treat it with a garden hose and risk losing the building, or call the fire brigade, he said.
Some would say that calling the fire brigade projects panic and it could damage the furniture, the prince said. But doing so would simply be acting responsibly, and you would save the house, he said, according to the people.
The Saudi Energy Ministry didn’t immediately reply to a request for comment.
The prince’s statements offer an explanation of why, behind closed doors, Saudi Arabia has been an advocate for an emergency meeting of the Organization of Petroleum Exporting Countries in order to deepen production cuts. Despite those efforts, the group seems to have abandoned tentative plans for urgent talks in February after the kingdom failed to persuade Russia.
The toll on oil consumption from the epidemic has been severe. Chinese refineries are throttling back to cope with weak demand, processing 25% less oil than they were last year. World oil consumption will decline this quarter for the first time in more than a decade as the virus reduces travel and economic activity in China, according to the International Energy Agency./Investing.com