Baku, Azerbaijan, Feb. 8
By Aygun Badalova - Trend:
The Gulf countries will pursue the strategy to regain market share by keeping oil production high, Jason Tuvey, Middle East Economist at British economic research and consulting company Capital Economics believes.
"Oil production is likely to be kept high in an effort to regain market share from high-cost producers, despite mounting calls from other OPEC members to cut production in order to shore up prices," Tuvey said in a report, obtained by Trend.
With Iran is increasing oil supplies following the lifting of sanctions, the economist thinks there will be little scope for the Gulf countries to raise their oil output further.
Free of sanctions, Iran plans to increase its oil export by 500,000 barrels per day, and then raise the figure by another 500,000 to two million barrels per day within a six month period.
Total OPEC production in 2015 amounted to 31.846 million barrels per day compared to 30.771 million barrels per day in 2014. The official production quota for OPEC production is set at 30 million barrels per day.
At the same time the report noted that the Gulf economies weathered the storm created by the collapse in oil prices well last year.
Saudi Arabia's economy grew by 3.4 percent, broadly the same pace as in 2014, according to the data published in the report. Qatar and Bahrain also recorded robust growth, while low-profile indicators suggest that activity in the other GCC countries held up well too, the report said.
"All of this stands in stark contrast to many other major oil producers. Russia's economy contracted by 3.7 percent and Venezuelan GDP probably fell by around 10 percent," Tuvey said.
Overall, British company expects that the Gulf's GDP will likely average around 1.5-2 percent in 2016, which is far below the rates of 5 percent or more recorded in the past decade.
Saudi Arabia's oil minister Ali al-Naimi talked about cooperation between OPEC members and other oil producers to stabilize the global oil market with his Venezuelan counterpart on Sunday, but there was no agreement to hold an early meeting of suppliers.