Baku, Azerbaijan, Oct.5
By Leman Zeynalova – Trend:
Adding more countries to the oil output cut deal of OPEC and participating non-OPEC countries will not be as effective as expected.
Earlier, Venezuelan oil minister Eulogio del Pino said that OPEC/non-OPEC coalition will try to recruit at least 10 and up to 16 more oil producing countries to join in output cuts.
Del Pino said that he had talked with Egypt and fellow OPEC member Equatorial Guinea was recruiting seven African countries, including Uganda, Chad and Congo.
“In Moscow, we invite Egypt to participate in the OPEC+ agreement,” he tweeted.
Moreover, earlier, Russia invited Turkmenistan to join the OPEC oil output cut deal. Russia’s Energy Minister Alexander Novak noted that Turkmenistan is not going to officially join the deal, but is ready to be an observer and take part in discussions on the current market situation.
“I’m not sure many of these countries will join the deal and even if they do, I very much doubt that it will have much impact on global oil supply,” Tom Pugh, the economist at British economic research and consulting company Capital Economics, told Trend.
He pointed out that most of them would not be in a position to cut by more than a few 10,000s barrels per day even if they wanted to.
Instead, the expert believes that the focus really needs to be on Iran, Iraq, Libya and Nigeria, as these are the countries which have added most of the unexpected global production over the last year.
On May 25, OPEC member countries and non-OPEC parties, Azerbaijan, Kingdom of Bahrain, Brunei Darussalam, Kazakhstan, Malaysia, Mexico, Sultanate of Oman, the Russian Federation, Republic of Sudan, and the Republic of South Sudan agreed to extend the production adjustments for a further period of nine months, with effect from July 1, 2017.
The reductions will be on the same terms as those agreed in November.
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