OPEC and allied oil producers are ready to hold an extraordinary meeting and will do what is needed if the current cut in oil output by 1.2 million barrels per day (bpd) does not balance the market next year, the United Arab Emirates’ energy minister, Suhail al-Mazrouei, said on Sunday.
Speaking at a news conference following the 101st meeting of Organization of Arab Petroleum Exporting Countries in Kuwait (OAPEC), Mazrouei reported that extending the output agreement signed in early December will not be a problem and producers will do as the market demands.
“What if the 1.2 million barrels of cuts are not enough? I am telling you that if it is not, we will meet and see what is enough and we will do it,” Mazrouei said.
The Minister reported that the plan to cut oil production is well studied but if it does not work, “we always have the power in OPEC to call for an extraordinary meeting.”
“If we are required to extend for (another) six months, we will do it... I can assure you an extension will not be a problem.”
OPEC and its Russia-led allies agreed earlier this month to cut down oil production by more than the market had expected. Despite that, oil prices fell on Friday to their lowest since the third quarter of 2017 as global oversupply kept buyers away from the market ahead of holidays over the next two weeks.
Minister Mazrouei said a joint OPEC and non-OPEC monitoring committee would meet at the end of February or the beginning of March, as producers aim to return the oil market to the balance reached in the summer of 2018.
Mazrouei was speaking at a joint news conference with the Iraqi and Algerian energy ministers as well as Saudi Arabia’s OPEC governor, Adeeb al-Aama.
Aama said oil market oversupply had fallen to 37 million barrels of crude in November from 340 million barrels in January 2017, when OPEC and its allies began cutting production in an attempt to lift the price of crude.
Saudi Arabia is fully committed to the reduction agreement, noted the governor, adding that the world’s top oil exporter’s production in January is seen at 10.2 million bpd, lower than its output target of 10.3 million bpd under the recent pact.
Saudi Arabia has over-committed with previous cuts, reducing more than its share and reaching a compliance of 120 percent from January 2017 until May 2018, asserted Aama.
Iraqi Oil Minister Thamir Ghadhban agreed with Saudi energy Minister Khalid al-Falih saying there was an expectation that the oil output cut decision could be renewed, adding that Iraq would be willing to extend the production agreement in April.
OPEC is set to hold its next oil output policy decision meeting that month in Vienna.
“We will be watching the prices and how they react over time.”
Kuwait and Iraq have chosen a consultant to assess areas with oil reserves on the border between the two countries and production policy will be decided based on the study.
