OPEC Chief Calls for Global Cooperation

OPEC Chief Calls for Global Cooperation

OPEC Secretary General, Abdullah al-Badri, has called on all oil-producing countries to cooperate in an attempt to tackle oil oversupply and remedy global oil price slide, while allowing new investments to pour into the industry, BBC reported. Al-Badri was reported to have blamed non-OPEC countries for the global oil glut.

Following the announcements, Brent crude fell 6.3% to $30.15 a barrel, while WTI shed 7.1% to $29.90. OPEC officials said the oil market was poised to start re-balancing itself after prices sank to their lowest since 2003. They also hinted that OPEC was willing to pitch in cutting supplies solely with help from other rival producers. While non-OPEC countries’ oil supply is expected to fall in 2016, output of OPEC majors is likely to increase further over Iran’s and Iraq’s plans to expand their production, Reuters informed.

OPEC and Russian oil industry officials intimated a possible joint action in the future, while Riyadh insisted on its 2014 policy aiming for an increased market share adopted by OPEC, determined to allow the oil market balance itself, wrote Reuters. Iraqi Oil Minister, Adel Abdul Mahdi, predicted that oil prices were to increase to $50 a barrel as of Q3 of 2016, and hinted Riyadh’s and Moscow’s flexibility in cutting crude output, without giving further details, wrote Bloomberg.

Until now, Moscow has refused to take part in a cooperation scheme to cut oil production, but amid the collapse of its currency to an all-time low and looming presidential and parliamentary election, Kremlin searches for ways to protect its revenues, explained Reuters in related news. In spite of its reluctance to take concrete steps, Russia’s oil industry is seen under threat due to numerous factors, in addition to Russian President, Vladimir Putin’s, recent decision to postpone a planned cut in oil export expenditure that led to the decline in exploration, according to The Wall Street Journal.

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