Qatar has affirmed the need to maintain current oil supply curbs over the long-term to ensure that the market continues to stabilise and guarantee that prices fully recover from the 2014 crash, Reuters reported.
Qatari Minister of Energy Mohammed al-Sada told Reuters he also supports the creation of a permanent platform for cooperation between OPEC and Russia after the current round of joint supply cuts finishes.
“There is a clear recovery in oil prices. But it has not been met with an increase in investments … Investment has been very low. My concern is that medium to long-term demand is met comfortably,” Sada said in an interview. “Investors are still cautious and over-conservative”.
“I would see the need to keep the [OPEC cooperation] momentum … We need to restore investments. It could take months … OPEC could start being concerned about gross over-tightening,” he added.
Sada stated that global oil demand was set to rise by 1.5 mb/d. However, global investment – currently around $400 billion – was still insufficient to guarantee the transition from mature fields to new projects.
OPEC and Russia agreed to production cuts at the start of 2017 to ease the global glut caused by the US shale industry that saw prices fall below $30 per barrel. Since, the agreement, prices rose to $70 a barrel in January 2018, the highest since 2014.
The price rejuvenation encourages US shale producers to increase investments in the sector and reinvigorate productions rates. Sada said US shale output was almost fully absorbed by demand increases but elsewhere investments were not growing.
Saudi Arabia has said cuts could continue into 2019 and that Riyadh and Moscow were considering a deal to extend their short-term supply cuts alliance to a long-term agreement lasting between 10 and 20 years.