The chairman of Saudi Arabia controlled oil company Saudi Aramco Khalid Al-Falih labelled the current oil price as “irrational”, and said it should be higher than $30 a barrel.
Speaking at the World Economic Forum in Davos, the chairman also made it clear if the oil price stays low Aramco would be able to endure a prolonged price slump. Opec, lead by Saudi, has predicted rivals in Russia and the US will struggle in 2016.
Al-Falih said: “If prices stay low we will be able to withstand [it] for a long time. Obviously we don’t hope for it".
The oil price continued to trade under the $30 mark today, despite a rally that sent it above $29, briefly pushing over $30.
The oil price has fallen by 70 per cent from its peak in the summer of 2014.
“I bet at the end of the year it will be higher than where we are now,” he added.
Earlier this month Aramco, thought to be the world's most valuable company, confirmed that it is planning to go public as Saudi Arabia looks to free up cash following the oil price slump.
Meanwhile, BP chief executive Bob Dudley said the current oil supply glut could be as bad as a similar glut in 1986.
Dudley told journalists at the World Economic Forum the rest of the year is going to “difficult” for oil producing countries.
“It is a big shock for producing countries. It reminds me of (the oil crisis in) 1986,” Dudley said.
In 1986, the oil price dropped from above $30 per barrel and barely climbed back above that until 2003.
The glut in ‘86 was also caused by a deceleration from industrial countries, similar to China’s shift to a consumption based economy now.
Dudley yesterday told the BBC oil could hit $10 per barrel due to current levels of supply.
Dudley forecast that over the Summer prices would hit their lows before recovering due to demand from China and North America.
“We could see a price $30 to $40 by the middle of the year and I think towards the end of the year it could be into the $50s," he said.
Earlier this month BP announced job cuts of 4,000 staff, 600 of which would be axed from its North Sea operations accounting for one in five of its employees in the region.