Baku, Azerbaijan, Dec.27
By Leman Zeynalova – Trend:
OPEC has had to accept that they underestimated the resilience of the US shale oil industry, Sijbren de Jong, an analyst at The Hague Center for Strategic Studies and an expert in energy security, told Trend Dec.27.
Commenting on the results of 2016, the expert said that for OPEC, it is a mixed bag.
“We saw the failure of the Doha meeting where countries were unable to agree on a freeze, with Saudi deputy Crown Mohammed bin Salman ruling out any deal that did not include Iran. But we also saw the face of Saudi Arabia later this year, when the countries did agree on a deal,” he added.
Regarding the expectations for the oil market in 2017, Sijbren de Jong believes that it all depends on whether the OPEC deal holds to be honest.
“A lot also rests on Russia playing ball, and it is hard to independently verify whether they will. If the agreement holds, expect the oil price to stabilize to a degree, but the days of $100 oil are very far away,” the expert said.
During the Vienna meeting held Nov.30, OPEC members decided to implement a new OPEC-14 production target of 32.5 million barrels per day. Later, non-OPEC countries agreed to cut the oil output by 558,000 barrels per day during the meeting held Dec.10.
Eleven non-OPEC countries agreed to reduce the oil output: Azerbaijan, Kingdom of Bahrain, Brunei Darussalam, Equatorial Guinea, Kazakhstan, Malaysia, Mexico, Sultanate of Oman, the Russian Federation, Republic of Sudan, and Republic of South Sudan.
OPEC and non-OPEC countries have pledged to implement the reached deal from Jan.1, 2017.
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