OPEC Hails Nigeria, Others Over Decline in Oil Supply

The Organization of Petroleum Exporting Countries has hailed Nigeria and other oil-producing countries across the globe over the reduction in the global supply of crude oil by 1.6 billion barrels since May this year,

The Secretary-General of OPEC, Muhammad Barkindo, during a video-conference of the Crescent Ideas Forum themed: ‘The Outlook on Energy’, noted that the reduction in crude oil supply was taken in the interest of consumers, investors and global economy.

He said, “Since May, the production adjustments undertaken by the participating countries have helped reduce the global supply by around 1.6 billion barrels, a truly impressive feat given the economic uncertainty overshadowing the industry.

“I would like to stress that these efforts were undertaken not just for the good of the DoC (Declaration of Cooperation) participating countries, but in the wider interests of consumers, investors and the global economy in general. There can be no recovery without market stability, and no one stands to benefit from volatility.”

“The participating countries agreed to a fair and effective compensation mechanism for those who were unable to achieve 100 per cent conformity in the first months of the agreement.

“These provisions stand out as a remarkable acknowledgement of both the commitment by these countries to support the market, and the scale of the challenge,

“There is no doubt in my mind that these decisive and proactive efforts helped put the oil market back on stable footing. In doing so, the DoC provided much-needed support to the global economy as it began to pick up steam in the third quarter of this year.”

Barkindo said that OPEC members, at the beginning of 2020 was optimistic about the global economy as well as the oil market growth, adding that the OPEC’s 2020 vision did not foresee the devastating impact of the coronavirus which has impacted the economies of the world adversely.

He added, “The oil demand in the OPEC outlook for 2020 is now slightly above 90 million barrels per day. This represents a sharp decline of nearly 10 million barrels per day from where we started the year, and almost an 11 million barrels per day contraction compared to what we forecast for the year back in January.”

Barkindo, noted that growth is expected to bounce back to 6.2 million barrels per day, in 2021 to over 96 million barrels per day, compared to the pre-coronavirus expectations for demand reaching almost 102 million barrels per day next year.

He explained that the recent revisions were due to the easing pace of the economic recovery and recent COVID-19 containment measures, which were assumed to impact transportation and industrial fuel demand well into next year.