Azerbaijani Energy Minister to Asharq Al-Awsat: OPEC+ Efforts Boost Balance, Organize Global Markets

The world’s future lies within the “energy mix” concept, but oil will remain a primary energy source for decades to come, said Parviz Shahbazov, Azerbaijan’s energy minister.

According to Shahbazov, efforts spent by the Organization of the Petroleum Exporting Countries (OPEC) and its allies have helped reinforce and regulate global energy markets.

In an interview with Asharq Al-Awsat, Shahbazov reaffirmed that Azerbaijan intends on strengthening strategic cooperation with the Kingdom of Saudi Arabia so that it spans several economic fields and boosts economic collaboration between the two countries, especially in the energy field.

Shahbazov noted that Saudi Arabia and Azerbaijan would be partaking in a number of cooperation projects involving renewable energy.

Joint Projects

“We have signed an agreement with Saudi Arabia’s ACWA Power to lay the foundations for the construction of a 240-megawatt wind park,” Shahbazov told Asharq Al-Awsat, adding that the power station’s tremendous capacity is essential not only for renewable energy sources in Azerbaijan but all countries in the region.

Baku, Azerbaijan’s capital, is also eyeing cooperation with Riyadh in the field of gas.

“We have a desire to cooperate in the gas sector and gas power generation, which will certainly be one of the channels for expansion of cooperation between the two countries soon,” said Shahbazov.

The minister moved on to reveal that Azerbaijan is expecting the arrival of a Saudi delegation this month, a visit that will give a chance to discuss new opportunities for expanding economic cooperation between Baku and Riyadh.

“We expect a Saudi delegation to visit this month to celebrate together the launch of a 240-megawatt wind power plant. We look forward to soon discussing ways for expanding economic cooperation with the visiting Saudi delegation,” said Shahbazov.

Saudi Arabia and Azerbaijan have previously signed various trade, diplomatic and political agreements that Shahbazov said needed more robust activation through additional talks and consultations.

Market Stability

The minister explained that Saudi-Azerbaijani cooperation in the oil and gas sector is vital for the stability of global oil and gas markets.

Moreover, the minister acknowledged Saudi Arabia’s decades-old role in strengthening the global market balance and stabilizing energy prices.

Saudi Arabia has always undertaken leadership initiatives, he noted, adding that Azerbaijan had joined the OPEC+ group, which is one of the most critical channels for stabilizing the global energy market.

“Currently, we see in this formula one of the most important tools for enhancing stability and achieving balance in the global energy market,” said Shahbazov.

“It can address developments in a more appropriate way for the market in the future.”

For Shahbazov, oil will remain the primary energy source for several years to come. Therefore, the role played by OPEC+ in market stability will stay vital for the future of energy.

What is more important than stabilizing prices is ensuring the sustainability of the world’s power supply. Energy prices can change over time, but it will not have the same effect as a shift in global energy supplies.

“For that reason, it is fair to appreciate the efforts of OPEC+,” said Shahbazov.

Regarding gas supplies, he asked an urgent question: Why are there high gas prices in Europe at a time there is a shortage in supplies?

“Despite the existence of strategies to treat the product, it did not prevent the emergence of a price and gas crisis,” noted the minister, adding that the crisis will likely perpetuate into the future, especially during winter.

“However, this situation does not include other countries in the world, as this crisis situation does not apply to the oil sector,” said Shahbazov, praising the efforts spent by OPEC+ to draw an effective roadmap for containing the global energy and oil market.

Pandemic’s Challenging Aftermath

Shahbazov stressed that the coronavirus pandemic had produced a real crisis in global energy markets.

The crisis has highlighted the need for greater cooperation among all parties benefiting from oil production and consumption.

Besides having created a very critical and challenging situation for all actors in energy markets, the pandemic shed light on the massive need for a joint mechanism between OPEC and non-OPEC members. For the time being, OPEC+ is facing this challenging situation and trying to find solutions to contain the crisis.

Shahbazov affirmed that more crises would take place in the future if the mechanism for cooperation remains absent.

“This calls for using our experiences in dealing with such situations to address the urgent issues facing the work of the (OPEC +) mechanisms in global energy markets,” he said.

“In general, we began to cooperate and work with each other and we were able to achieve a form of sustainability for oil supplies,” he noted.

“We were able to launch a program to increase energy production supplies in global markets step by step and month by month, and this program will continue with us until the end of this year and the whole of 2022,” shared the minister.

Saudi Arabia’s Green Initiatives

New energy sources are certainly a factor of prosperity and development for the region, remarked Shahbazov, adding that renewable energy addresses a major global problem: climate change.

In Shahbazov’s opinion, promoting technological discoveries that address climate change by reducing carbon emissions, sustaining food stocks, and establishing environmentally friendly transportation is of paramount importance.

According to the minister, this is what the Saudi Green Initiative cares about and is working on translating on the ground.

“This initiative (Saudi Green Initiative) pushes the world towards much-needed cooperation for a quality of life without climate or environmental disasters,” said Shahbazov.

British finance minister Rachel Reeves, facing criticism for travelling to China during financial market turmoil at home, said on Saturday that "pragmatic and predictable" relations with Beijing would help boost economic growth and trade.

Under pressure from a sharp rise in British interest rates, Reeves defended her budget at the start of the two-day visit to China, where she is seeking to revive high-level economic and financial talks that have been frozen for nearly six years.

"The fiscal rules that I set out in my budget in October are non-negotiable, and growth is the number one mission of this government to make our country better off," Reeves told reporters at a Brompton bicycle shop in Beijing.

"That's why I'm in China to unlock tangible benefits for British businesses exporting and trading around the world to ensure that we have greater access to the second-largest economy in the world."

The rise in British government borrowing costs, due in part to a global bond selloff, prompted comparisons with the 2022 "mini-budget" crisis that forced then-Prime Minister Liz Truss out of Downing Street.

However, this week's market moves have been less sharp and there has so far been no evidence of the strain on institutional investors that forced the Bank of England into emergency bond purchases in 2022.

On trade, asked whether Britain would follow Washington and Brussels in imposing tariffs on Chinese electric vehicles, Reeves, who will be in Shanghai on Sunday, said: "We keep issues under review but we make decisions in our national interest."

British car manufacturers, "like Jaguar Land Rover, export substantially to Chinese markets, and we want to help them to grow."

After her bicycle shop visit, Reeves met Vice President Han Zheng, telling him it was "important to have open and frank dialogue in areas where we agree, but also in areas where we have different views."

'COMMON GROUND'

Her delegation, which includes Bank of England Governor Andrew Bailey, Standard Chartered Chairman Jose Vinals, and HSBC Chairman Mark Tucker, then met Chinese counterparts led by Vice Premier He Lifeng.

He urged British financial firms to expand renminbi services and promote deeper yuan internationalization, while inviting them to participate in green finance and the pension industry in China.

Reeves said she looked forward to China issuing its first overseas sovereign green bond in London this year.

Her visit follows a dialogue opened last year between Prime Minister Keir Starmer and President Xi Jinping, the first between the two countries' leaders since 2018.

Reeves told He that Russia's invasion of Ukraine, rising geopolitical tensions and climate change meant that they faced a much more challenging environment than when their predecessors last met.

"It is important to prevent economic leaps weakening our national security and economic resilience," she said, adding both she and He wanted to "find common ground" in this regard.

He said Beijing will work with London to ensure a fair, non-discriminatory business environment for each country's firms.

The approach adopted by Starmer's Labor government, elected in July, contrasts with that of the previous Conservative administration, which took a robust path to differences with China - particularly over human rights, Hong Kong and allegations of Chinese espionage.

Starmer has long described his desire to build a relationship with China that is "rooted in the UK's national interests" by boosting trade, a task that may become more difficult if US President-elect Donald Trump follows through on his threat to impose tariffs on all imports.

China is Britain's fourth-largest trading partner, accounting for goods and services trade worth almost 113 billion pounds ($138 billion).

Azerbaijani Energy Minister to Asharq Al-Awsat: OPEC+ Efforts Boost Balance, Organize Global Markets