EMEA News
Non-OPEC Involvement in Oil Cuts Imperative, Says OPEC Secretary General
Mohammed Barkindo, secretary general for the Organization of the Petroleum Exporting Countries (OPEC) has sent a clear message that it is essential for his cartel and non-OPEC nations to address overcapacity in the oil market, Reuters reports.
Barkindo, who made the remark Monday prior to discussing the coordination of output with Alexander Novak, energy minister for Russia, was echoing a remark made last week by Suhail Mohammed Al Mazrouei, energy minister for the United Arab Emirates.
Al Mazrouei said,"It takes more than OPEC to stabilize the market - there is a realization that other big players need to do their jobs," including U.S. shale producers.
He added: "If we all collectively agree that there is an oversupply, then we need to collectively participate in fixing this; we are sending an open invitation to everyone."
Barinko went on to note that Russia is a crucial partner in addressing energy challenges, and both sides are committed to stable oil markets.
Rhetoric aside, Anthony DiPaola, contributor to Bloomberg, reminded Bloomberg Markets: Middle East of some fundamental problems concerning the agreement made by OPEC members in Algeria to reduce oil production: "Russia hasn't said yet whether they'll make a cut or a freeze ... and a freeze from them wouldn't really take enough oil out of the market."
He said another glaring problem is OPEC members such as Iraq seeking exemption from the deal: "And what's more, they're also disputing some of the OPEC figures the group will use to set a baseline for cuts – so on two fronts, Iraq is throwing a wrench in the works."
All this seems to fly over the head of the Saudis, whose oil minister Khalid Al-Falih declared after three-way talks with Russia and Qatar in Riyadh that he is optimistic about future oil prices and that the gulf nations and Russia have reached a common understanding to cooperate in price stabilization.
Many critics think OPEC's bid to limit production to a range of 32.5 million to 33.0 million barrels per day (bpd), compared with record output of 33.6 million bpd in September, will do little if anything to foster a true market rebalance.
Even the World Bank, in recently raising its 2017 crude oil price forecast to $55 per barrel from $53 per barrel, conceded that "there is considerable uncertainty around the outlook as we await the details and the implementation of the OPEC agreement, which, if carried through, will undoubtedly impact oil markets."
