Opec+ oil output deal could be 'tweaked', extended to 2022
A tweak in production cuts is possible with a consensus formed among all members, experts said
The Opec+ production cut agreement reached this April to support falling prices and low demand could be adjusted in the future, a top oil minister said.
In the opening session of the Abu Dhabi International Petroleum Exhibition Conference (ADIPEC 2020), the Saudi Arabia Minister of Energy Prince Abdulaziz bin Salman Al-Saud said that the production cuts could be "tweaked" in the future and extended to 2022.
"The agreement goes all the way beyond 2021 to the end of April with the caveat that we could also decide to extend it for the rest of 2022," Prince Abdulaziz said in the virtual session.
When asked if the existing cuts of 7.7 million barrels per day will be maintained or eased to 5.7 million bpd by January 2021, Prince Abdulaziz underlined: "In the past, we did tweak. I believe with consultation with our friends, some of them are present here and some of them are not, but I know how heartily they are committed to the principle of tweaking. I would go and argue it could be a tweak even beyond what the so-called analysts are talking about."
Meanwhile, the UAE Minister of Energy and Infrastructure Suhail bin Mohammed Faraj Faris Al Mazrouei said that a tweak in production cuts is possible with a consensus formed among all members.
"Opec+ are up to the challenge of doing whatever it takes to create that balance. I am proud of what has been achieved so far. We look forward to continuing this journey. We have the ability to tweak."
The group, he said, has been disciplined in keeping track with the cuts. "We are all committed partners and it's a fair deal. This group will continue to work together in medium and long-term cooperation," Al Mazrouei added.
Russia Minister of Energy Alexander Novak forecasted demand for oil to continue to grow for at least next 10-15 years.
"It's too early to say the era of oil is over. It would take about 2-3 years to come back to a 100-million barrels per day or close to that level."
No cause for alarm
Opec Secretary General Mohammad Sanusi Barkindo revealed that global stimulus packages, including guarantees, amounted to nearly $25 trillion - about 20 per cent of the global GDP. He said the demand for oil is set to plunge by 9.8 million barrels per day this year but a recovery was expected next year.
"We are seeing a contraction of nearly 9.8 million barrels a day for 2020. But the 2021 forecast is continuously being revised upwards north of 6.5 million barrels a day at the moment. And you have seen the reaction of the markets after the US elections. So there is no cause for alarm."
Barkindo highlighted that all producers are showing 100 per cent compliance with the production cuts.
"We have all risen to this challenge and shown commitment to stay the course.
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