Secretary General Secretary General, Organization of Petroleum Exporting Countries, OPEC, Mohammad Sanusi Barkindo has disclosed that close to 100 million barrels of oil are produced and consumed every day, globally and over 60 million barrels are exported.
He made this known in a speech delivered by during the CSIS Luncheon in Washington DC, USA.
The OPEC boss, who decried the period when price was lull in the market, said he was impressed that the market is appreciating now. According to him, “when the market has appeared skewed to oversupply, we reacted accordingly, and equally, when concerns were expressed regarding demand outpacing supply, the partners in the ‘Declaration’ took the appropriate action.”
“I am happy be here over two years later and deliver the scorecard to CSIS and say that those sceptics were mistaken. It took us around 18 months to return OECD inventory levels to the five-year average, our stated metric. Moreover, when we saw conformity levels to the voluntary production adjustments overshoot in the middle of 2018, we were agile and flexible enough to modify course and stay ahead of the curve.”
Barkindo who described Oil as the lifeblood that fuels the current civilization and keeps modernization moving added that the true scale of the industry and its strategic value to both producers and consumers underscores the importance of sustainable oil market stability.
“At this juncture, I would like to take you back to my last visit to CSIS in December 2016. It was still a dark time for the industry, which had been greatly impacted by the severe three-year downturn from 2014-2016.”
“However, if you permit me to say, there was a chink of light. My visit came only a few days after we had put together the landmark ‘Declaration of Cooperation’ in Vienna between 24 OPEC and non-OPEC producing nations. The US was our first port of call, which underscores the importance we attach to the relationship between the US, OPEC and the global oil industry.”
“The goal of the voluntary production adjustments in the ‘Declaration of Cooperation’ was to stimulate and accelerate the drawdown of the huge stock overhang, expedite the rebalancing of the market, restore a sustainable stability to the industry and enable investments to return.
It was a decision taken in the interests of both producers and consumers and to help restore confidence to the market.”
He recalled that the idea of bringing on board non-OPEC nations to take part in the market rebalancing process and on delivering on the stated objectives was greeted with some skeptics, not only in the US, but elsewhere too.
“I think we can all appreciate the history of the modern oil industry has been littered with tremendous opportunities, as well as huge challenges; large booms, and major busts; and it has attracted many great pioneers and innovators.”
“We have seen plenty of ups and downs for the oil industry in the decades that followed, too many to fully elaborate on over a lunch! It is clear that cycles are part of the market’s ever evolving nature and we cannot eliminate the ups and downs of these altogether.
However, we can look to help smooth the passage of the cycles through focusing on a balanced market, and helping support a stable environment.”