A Review of the Nigerian Energy Industry

OPEC meeting ends without oil supply boost agreement

*As Barkindo replies Trump’s OPEC not monopolist cartel tweet

*Mohammed Barkindo, OPEC Secretary General

OpeOluwani Akintayo

24 September 2018, Sweetcrude, Lagos — The 10th meeting of the Joint Ministerial Monitoring Committee, JMMC, between OPEC and non-OPEC energy ministers in Algiers on Sunday ended with no formal recommendation for any additional supply boost.

This follows President Trump’s Twitter comment on Thursday, calling on the Organization of the Petroleum Exporting Countries, OPEC, to increase oil supply in the market to reduce prices,

President Trump had called out the organisation after benchmark Brent oil reached $80 a barrel this month, demanding that it lower prices.

“We protect the countries of the Middle East, they would not be safe for very long without us, and yet they continue to push for higher and higher oil prices! We will remember. The OPEC monopoly must get prices down now!” Trump wrote on Twitter.

However, OPEC said “no immediate plan for additional increase in crude output”.

“I do not influence prices,” Saudi Energy Minister Khalid al-Falih told reporters after the meeting.

Crude oil prices reached $80 per barrel after OPEC and its partners, especially Russia agreed in a Declaration of Cooperation, DoC, late 2016, to cut crude supply into the market by 1.8 million barrels per day.

However, shale producers in the United States have countered OPEC’s effort at boosting prices by flooding the market with shale oil.

There has also been a decline in oil exports from OPEC member Iran due to fresh U.S. sanctions.

Although Falih said Saudi Arabia has capacity to increase oil output but OPEC is yet to agree on such move.

“My information is that the markets are adequately supplied. I don’t know of any refiner in the world who is looking for oil and is not able to get it,” Reuters reported, quoting Falih.

Although he believed a trade war between China and the United States as well as U.S. sanctions on Iran were creating new challenges for oil markets yet, Russian Energy Minister, Alexander Novak, said no immediate output increase was necessary.

Oman’s Oil Minister Mohammed bin Hamad Al-Rumhy and Kuwaiti counterpart Bakhit al-Rashidi told reporters after Sunday’s talks that producers had agreed they needed to focus on reaching 100 percent compliance with production cuts agreed in June.

That also means filling the gap left by Iran however, Al-Rumhy said the exact mechanism for doing so had not been discussed.

On Trump referring to OPEC as “monopoly”, OPEC’s Secretary-General, Mohammed Barkindo in his speech at the meeting where the 2018 version of the World Oil Outlook, WOO was also launched, said the organization is “transparent” in its dealings, and as such “it should be evident that OPEC is neither a monopoly, nor a cartel, but a responsible global platform that consistently strives to maintain stability in the oil markets, in the interests of both producers and consumers. We have a vested, mutual interest in the healthy growth of the global economy”.

The OPEC chief said the OPEC-Non-OPEC cooperation will continue to enhance dialogue and build bridges across the industry.

“It will work hard to ensure a sustainable stability in the global oil market, enabling steady and lasting economic growth across consuming and producing countries”.

On Sunday, Iranian Oil Minister Bijan Zanganeh said Trump’s tweet “was the biggest insult to Washington’s allies in the Middle East”.

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