The Global News Source for the World of Science
08 August 2018Lab Chat
The current President of OPEC has indicated that the bloc will look to continue close ties with non-OPEC countries, and even opened the door to expanding its membership to include others. Suhail Al Mazroui, who is also the oil minister for key OPEC member UAE, has said that the organisation is eager to “institutionalise” its ongoing partnership with non-OPEC nations.
At present, OPEC consists of 14 member nations, comprised of the UAE, Saudi Arabia, Iran, Kuwait, Qatar, Iraq, Indonesia, Libya, Algeria, Nigeria, Angola, Gabon, Ecuador and Venezuela. In December 2016, a historic conference known as the OPEC-non-OPEC Producing Countries’ Ministerial Meeting took place, at which 11 other nations came together to discuss global oil interests.
These countries were comprised of Russia, Azerbaijan, Bahrain, Brunei, Equatorial Guinea, Kazakhstan, Malaysia, Mexico, Oman, Sudan and South Sudan, although Equatorial Guinea have since withdrawn from the process.
The meeting resulted in agreement between the 25 (now 24) nations to cut oil supplies in order to provoke a surge in their price on the global market. After initially removing 1.8 million barrels per day from the supply chain, the arrangement was continued until the end of 2018.
By all accounts, it appears to have succeeded in its mission, as the price of crude oil has recovered from a lowly $30 (Dh110) per barrel (or less) in 2016 to a high this year of $80 (Dh294). At present, the price is resting around the $75 mark (Dh275), which must be recognised as a massive improvement and is the highest watermark since 2014.
The US has put increasing pressure on OPEC countries to boost production, resulting in divisions within the cartel. Both Iran and Venezuela are keen to resist increasing production as they want to stimulate prices even further, but external pressure from both the States and Russia has prompted Saudi Arabia to suggest a compromise increase of 1 million barrels per day.
Russia wants more, at 1.5 million barrels per day. As a result of the disagreement, oil prices have been fluctuating of late, as spectators are unsure which way the major players will jump. In the midst of all this turmoil, Al Mazroui has provided a calming voice. Not only calling for unity among OPEC members, he has indicated that continued cooperation with non-OPEC nations can be beneficial for everyone.
“Over the next couple of days, and in the months ahead, we will look to further institutionalise OPEC and non-OPEC 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,” he said. Whether or not that institutionalisation will result in the enlargement of OPEC remains to be seen, though Al Mazroui seemed to suggest the door is open.Download PDF