Asks crude-producing non-members to become a part of OPEC to curtail global supply and enable stability in the market.
10 Oct 2017 | 4119 Views | By Autocar Pro News Desk
The 24-member strong Organisation of the Petroleum Exporting Countries (OPEC) has been facing competition from independent oil producers that has seen over-supply, bringing down the price of crude oil to historic lows.
In a press conference held earlier today, Mohammed Barkindo has asked crude-producing non-members to become a part ...
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The 24-member strong Organisation of the Petroleum Exporting Countries (OPEC) has been facing competition from independent oil producers that has seen over-supply, bringing down the price of crude oil to historic lows.
In a press conference held earlier today, Mohammed Barkindo has asked crude-producing non-members to become a part of OPEC for curtailing global supply for bringing out stability in the market for what it terms as a ‘Noble’ initiative.
Oil prices have come down to historic lows of $50 barrel from the high of $147 barrel in 2008. Barkindo stated that leading the enrolment of new membership was driven by Saudi Arabia and Russia. From January 2017, OPEC and few other producers reduced production by around 1.2 million barrels per day, contrary to the production in US production that increased by almost 10 per cent this year.
Earlier this year, OPEC had reached out to the independent oil producers in the USA, reiterating OPEC’s invitation Barkindo said, "I would like to invite prospective candidates, producers to join this global effort in order not only to restore the stability that had eluded this market for three years, but how to sustain it going forward. The more the better for the industry as well as global economy, we had our exploratory meetings to explore areas of common interest. We were both pleasantly surprised with the outcome and the call by independents themselves that we need to continue this interaction and we are looking forward to reconvening these meetings with them shortly."
The reaching out to new members has been on the back of the unprecedented supply-driven cycle, the industry has been witnessing, while OPEC pushes out to take this shared responsibility with all seriousness it deserves.
Commenting on the India story, Barkindo said, “At OPEC, we have been paying close attention to these macroeconomic and business trends in India. Some of them shall directly benefit the growing populations of OPEC's own member countries."
He mentioned that oil demand growth has been steadily increasingly from India and by 2040 it is and is expected to rise over nine percent by 2040 from 4 percent. The demand is estimated to increase by more than 150 percent or 10.1 million barrels per day, currently India’s demand is around 4 thousand barrels per day (MBPD),
As per PTI, during 2000 to 2015, India's imports from OPEC nations increased from $2 billion to nearly $140 billion. OPEC countries' imports from India increased from $5 billion in 2000-2001 to $56 billion by 2015.
"In terms of crude oil, what we see is similarly impressive in terms of growth. India's total imports have risen to close to 4.3 MBPD in 2016 from around 1.5 MBPD in 2000. Nearly 80 percent of these total imports came from OPEC member countries," Barkindo said. This has been because of demand in India, which last year was the fastest in the world, with an increase of close to 340,000 barrels per day or 8.3 per cent.
India currently is the world's third-largest oil consumer.