23 June 2018, Sweetcrude, Lagos — The Organisation of the Petroleum Exporting Countries, OPEC has hinted on its intention to “review” the oil cut deal entered into with non-OPEC countries including Russia, targeted at stabilising oil prices in the international market.
The President of the group who is also the UAE Minister of Energy and Industry, Suhail Mohamed Al Mazrouei made the intention known on Friday in his opening address at the ongoing 174th Meeting of the OPEC Conference obtained by SweetcrudeReports.
According to him, the group’s discussion will “focus” on “reviewing all the market fundamentals to help better understand the market balance and stability” every party to the oil cut deal “all desire”, in the interests of producers, consumers, and the global economy.
“We fully appreciate and take on board the viewpoints and concerns of all industry stakeholders. We are watchful, responsive and fully committed to market stability and global energy security”.
“Only last month, the JMMC acknowledged the rising concerns expressed by some importing and consuming countries regarding potential shortages in the global oil market and requested the JTC, supported by the OPEC Secretariat, to continue to closely monitor the oil market and to report any fundamental changes”.
“We will discuss these findings and carefully analyze all the numbers today, and of course, tomorrow in the OPEC and non-OPEC Ministerial Meeting”.
However, he warned that despite its intention to review market fundamentals, the group definitely does not want a return of market glut, stressing that the focus is on making sure that the market is both well-supplied and balanced.
“We need to continue to tread carefully; none of us wants to see the return of the kind of volatility that allows pessimism to return to the markets”.
“This also includes looking beyond the short-term, with a specific focus on investments”.
Al Mazrouei said although so far in 2018, the pace of investment has gradually picked up, yet, the market has not seen enough robust investment in long-cycle projects which he described as the baseload of future supply, the foundation of this industry’s future, and will be vital to long-term global economic expansion.
“To put this into some perspective, in the period to 2040, the required global oil sector investment in OPEC’s World Oil Outlook is estimated to be $10.5 trillion, with oil demand set to surpass 111 million barrels a day by 2040”.
“It is also important to remember that investments are not only about boosting new production. Oil producers also need to account for natural decline rates”.
“Every effort should be made to avoid a potential supply gap that could present a future serious challenge”.
He explained that beyond the important task of rebalancing markets in the short-term, the vision for a cooperative and forward-looking OPEC is something that all members should work towards.
“Over the next couple of days, and in the months ahead, we will look to further institutionalise this cooperation, in order to continuously adapt to ongoing market dynamics, in pursuit of the interests of producers and consumers, whilst promoting healthy global economic growth”.
“It is important that we maintain all possible avenues for cooperation and understanding for the benefit of OPEC countries, in particular, and the world at large”.