Baku, Azerbaijan, Dec. 27
By Ali Mustafayev – Trend:
The OPEC + countries may not extend the agreement on reduction of oil output, which was recently extended until the end of 2018, chief researcher of the Institute of Economics of Kazakhstan, expert on energy issues Oleg Yegorov told Trend.
Earlier, Issam Al-Marzouk, Kuwait's minister of petroleum, Electricity and Water Resources, also said that OPEC and the non-OPEC members of the agreement could withdraw from the deal by the end of 2018.
"Sharp jumps in oil prices do not lead to anything good for any country, having serious reserves hydrocarbons. Such statements are based on a hope that the price of oil will stabilize at $60-65 per barrel, which, in turn, is expected to lead to the fact that new agreements will lose their relevance and force," Yegorov said.
He also stressed that oil prices can reliably stabilize due to several factors.
"First, the oil shale boom passed its peak period, and now the issue is about maintaining the level of shale oil production at the existing level, which has recently been achieved in the US. To do this, the US will need to purchase new drilling rigs worth millions of dollars, and therefore the desire of Americans to influence world oil prices will be more moderate, given that stable oil prices are also in their sphere of interest," said Yegorov.
According to him, the stability of world oil prices can be guaranteed by the fact that there are no new discoveries or new large-scale deposits.
"New oil fields, discovered in Russia and Canada in terms of production are insignificant. There are no deposits with billions of tons of oil reserves, as it was before, which may allow us to predict relative fixing of oil output worldwide. Stabilization of supply and demand in the world market will be a significant driver of the development of the oil industry," the expert said.
Yegorov added that for these reasons, OPEC's deal could lose its significance in 2019 if the oil producing countries adhere to moderate level of oil production, and in absence of unexpected cataclysms, as it was, for example, with the accident in the Gulf of Mexico, which affected oil prices in its time.
Previously OPEC announced that it, along with Russia and several other non-OPEC producers, had reached an agreement to extend its production deal for another nine months. This would shift the expiration date of the agreement from March to the end of 2018. The agreement is on the same terms as of the Nov. 2016 agreement.