Mohammed Barkindo Secretary General of the Organisation of Petroleum Exporting Countries (OPEC) has commended G20 member countries for their support to oil market stability and solicited their support on OPEC decision.
Barkindo made the commendation at the Teleconference Extraordinary G20 Energy Ministers Meeting on Friday.
“We welcome the importance that the G20 attaches to oil market stability. We also appreciate that many G20 Members are large consumers of oil.
“In this regard, we need to appreciate that any shortfall in investments in the coming year can sow the seeds for future energy security issues in the years ahead.
“It is in all of our interests to support stability in this vital global industry,’’ he said.
He also commended Fatih Birol, in his role as Executive Director of the IEA, for his tireless work over the past few weeks in dialogueing with both producers and consumers.
“As I mentioned in my remarks yesterday to the 9th Extraordinary OPEC and non-OPEC Ministerial Meeting, we need to dare, to believe and cooperate with each other.
“There is a huge historic challenge before us, but I firmly believe that it’s not insurmountable if we work together in solidarity and courage for the common cause of market stability,’’ he added.
The OPEC scribe also thanked the Kingdom of Saudi Arabia and King Salman bin Abdulaziz Al-Saud, Crown Prince Mohammed bin Salman bin Abdulaziz Al Saud; and Prince Abdul Aziz Bin Salman, the Minister of Energy, for convening the extraordinary G20 energy ministers meeting.
He said that when the year 2020 began, no-one could have dreamt up the situation we found ourselves in today.
He noted that the COVID-19 pandemic had pervaded almost every aspect of daily lives and a major disruptor in terms of the tragic loss of lives.
According to him, it has forced governments into widespread lockdowns, economies in distress and schools closed.
“ Every economic sector has been impacted by this silent beast. This is clearly evident in global oil.
“Every producer, many of whom are developing nations, has been impacted; no-one is immune.
“We need to find solutions to help all peoples of the world, the industry and related businesses as we try and navigate these extraordinary times.
“This was evident in the responsive and responsible decision taken yesterday by OPEC and participating countries in the ‘Declaration of Cooperation’ to adjust crude oil production by 10 mb/d beginning on 1 May 2020,’’ he said.
The supply cut, he said was for an initial period of two months; by then it reduced to eight mb/d from July to December 2020; and by six mb/d for the period of January 2021 to April 2022, in the interests of producers, consumers, and the global economy.
He said that there was need to broaden this cooperation and welcome the support of others, adding that complex challenges, needed comprehensive and ‘global’ solutions.
“We see global GDP growth in 2020 at a negative 1.1 per cent, a greater contraction than that for the Great Recession of 2008-2009 and global oil demand growth is forecast to drop by 6.8 mb/d, with the second quarter alone around 12 mb/d.
“These are jaw-dropping numbers! the jaw drops even further when we look at the supply and demand imbalance in the 2Q20, if no action is taken.
“There can be a colossal excess volume of 14.7 mb/d, which will add a further 1.3 billion barrels to global crude oil stocks.
“This figure suggests that the available global crude oil storage capacity will be exhausted before the end of May.
“There is a ghostly spectre encircling the oil industry; it needs to be addressed urgently.
“We need to act now, so we can come out of other side of this pandemic with the strength of our industry intact,” he added. (NAN)