August 14, 2022

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Saudi crown prince says unrealistic energy policies will lead to higher inflation

Saudi crown prince says unrealistic energy policies will lead to higher inflation

Saudi Crown Prince Mohammed bin Salman attends an Arab summit in Jeddah, Saudi Arabia, July 16, 2022. REUTERS/Evelyn Hochstein

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JEDDAH, Saudi Arabia (Reuters) – Saudi Crown Prince Mohammed bin Salman said on Saturday that more investment in fossil fuels and clean energy technologies was needed to meet global demand and that unrealistic emissions policies would lead to unprecedented levels of inflation.

The prince said that Saudi Arabia announced raising its production capacity to 13 million barrels per day by 2027 from a nominal capacity of 12 million now, and “after that, the kingdom will not have any further ability to increase production.”

He was addressing a US-Arab summit in Jeddah attended by President Joe Biden, who is eager to see Saudi Arabia and its OPEC partners pump more oil to help bring down the high cost of gasoline and ease the highest inflation rate in the United States in four decades.

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Prince Mohammed said that adopting unrealistic policies to reduce emissions by excluding major sources of energy will lead in the coming years to unprecedented inflation, an increase in energy prices, an increase in unemployment and exacerbation of serious social and security problems.

The de facto ruler of the world’s largest oil exporter said that Covid-19 and the “geopolitical situation” require more joint efforts to support the global economy, and that the transition to sustainable energy sources requires a “realistic and responsible” approach.

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The summit brought together Biden with the leaders of six Gulf countries, Egypt, Jordan and Iraq. Biden held bilateral talks with Saudi leaders on Friday in Jeddah.

US officials said Biden will discuss energy security with the leaders of Gulf oil producers and hope to see more action by OPEC+ to boost production, but it is unlikely that there will be any bilateral statements from the talks.

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(Covering) Ghaida Ghantous and Maha El Dahan Editing by Mark Potter and Clelia Ozil

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