OPEC Secretary-General sees solid demand outlook

Saudi Arabia's decision to postpone plans to expand oil capacity should not be interpreted as an assessment that crude demand is falling, the OPEC secretary-general said.

"Firstly, I want to make it clear that I cannot comment on a Saudi decision (...) but this should in no way be misconstrued as an opinion that demand is falling," Haitham Al Ghais told Reuters in Dubai, during the World Government Summit.

The Saudi government ordered state oil giant Aramco on January 30 to lower its sustained maximum production capacity target to 12 million barrels per day (bpd), 1 million bpd less than it had announced in 2020 and projected for 2027.

Some sources told Reuters that the kingdom's surprising reversal on its oil expansion plan had been brewing for at least six months and was based on the assessment that much of Saudi Arabia's excess capacity was not being monetized.

Saudi Arabia is the world's largest oil exporter and de facto leader of the Organization of the Petroleum Exporting Countries (OPEC).

OPEC raised its medium and long-term global oil demand forecasts in its annual report published in October.

The World Oil Outlook report forecasts global oil demand to reach 116 million barrels per day (bpd) by 2045, about 6 million bpd more than in the previous year's report, with growth led by China, India, other Asian countries, Africa, and the Middle East.

"We stand by what was published in our latest outlook; we firmly believe they are solid," Al Ghais said.