Coordination between members of oil-exporting cartel OPEC and non-member producers is ‘vital’ to rebalance the market, OPEC chief Mohammad Barkindo said Monday.
‘We believe it is vital that both OPEC and non-OPEC countries come together and take coordinated… action to rebalance this market for the common good of all,’ OPEC’s secretary general said at a forum in Abu Dhabi. OPEC pledged after a meeting in Algiers on September 29 to cut production for the first time in eight years on the back of a sustained depression in global prices.
‘The agreement underlined the organisation’s commitment to sustainability of oil markets,’ Barkindo said. Speaking on the sidelines of the forum, Barkindo said major non-OPEC exporter Russia is ‘on board’ with the cartel’s agreement to limit production, according to Bloomberg. ‘We as OPEC remain committed to the Algiers accord,’ Barkindo said. ‘I have heard from the highest quarters in Moscow that Russia is on board.’
OPEC officials have held talks with Russia and other non-cartel members in Vienna to debate how to implement the plan. ‘Russia was always very consistent,’ Barkindo told reporters in Abu Dhabi. OPEC members Iraq, Iran, Nigeria and Libya have all sought exclusion from the cartel’s exemption plan, Bloomberg News reported. But the OPEC chief said Tehran ‘will be part’ of the Algiers agreement. Since a nuclear deal with world powers took effect in January and international sanctions were lifted, Iran has rapidly increased its oil exports from around 1 million barrels per day (bpd).
On Wednesday, Tehran’s Oil Minister Bijan Namdar Zanganeh was quoted by the Mehr news agency as saying output in late October was 2.44 million bpd. Sitting on the fourth-largest oil reserves in the world and a main rival of OPEC kingpin Saudi Arabia, Iran is seeking to recover lost market share. Iraq’s Oil Minister Jabbar Al-Luaibi, meanwhile, said Baghdad was ‘determined’ to cooperate with all OPEC and non-OPEC members to ‘keep the prices stabilised’ and production at ‘appropriate’ levels.
Iraq said last month it should not participate in the deal because it is waging a war against the Islamic State group. Some analysts have said that Baghdad’s position risks derailing implementation of the OPEC agreement. Details of the deal will only be determined during the group’s meeting on November 30 in Vienna. Over the past two years, oil has lost around 60 percent of its value because of a supply glut.
UAE Energy Minister Suhail al-Mazrouei said Monday that he was ‘optimistic’ with the glut ‘almost gone’ compared with one year ago. Prices currently hover at around $45 per barrel.