OPEC Courting More Oil Producers to Restore Stability

OPEC is courting US shale oil producers and other crude-producing nations to join the oil cartel to restore equilibrium price in the market, which would be advantageous for India as the country is one of the leading consuming countries. OPEC Secretary General Mohammed Barkindo on Tuesday said that OPEC was open for other producers to join to restore stability. “When we brought together 24 producing countries in December of last year for the declaration of cooperation, we made it very clear that it was still open to other producers who might want to join in this voluntary noble initiative to restore stability to the market,” he told reporters in the national capital.

Speaking of rising crude oil price, Mohammed Barkindo said that for India, which is dependent on OPEC countries for 90% of its imports, will require the active participation of both OPEC and other non-OPEC countries to restore balance. Saudi Arabia and Russia, he said, are leading the initiative to bring in more producers. “It is still work in progress,” he added.

“India as a leading consuming country that depends on OPEC member countries for 90% of its imports, of course, will require the active participation of not only OPEC and other non-OPEC countries, first of all, to restore stability… not very high low, not very low,” he said adding that OPEC does not get involved in price projections.

OPEC’s focus is on to jointly implement the supply adjustments in order to continue to accelerate the destocking to restore stability, Mohammed Barkindo said adding, if the balance is restored between demand and supply of crude oil, it would be in the best interest of the global economy.

The Organization of the Petroleum Exporting Countries (OPEC) is trying to reinstate its dominance in the oil industry by trying to maintain crude prices at a sustainable level. Oil prices have crashed to USD 50s now, from the high of USD 147 per barrel in 2008. Last year, the bloc and some others producers decided to reduce production by around 1.2 million barrels per day from January 1, 2017. But US production has soared by almost 10% this year, driven largely by shale drillers, PTI reported.