BAKU, Azerbaijan, June 19
By Leman Zeynalova – Trend:
It is too early to talk about stabilization of oil prices at $50 per barrel, Adviser to the Azerbaijani Minister of Energy Zamina Aliyeva told Trend.
“Although the measures taken by OPEC+, as well as the drop in oil production by other countries support oil prices, it is too early to talk about stabilization of oil prices at $50 per barrel. But it is desirable. The oil industry is in the unpredictable and unstable period. Currently, the main goal is to prevent even deeper crisis in the oil market. The measures to reduce oil production in large volumes are also taken for this purpose,” she said.
Increasing global demand supported by the economic growth is the main factor determining the reasonable prices for the development of the oil industry today and in the future, according to Aliyeva.
“But global economic recession and uncertainty about the recovery period of demand puts downward pressure on oil prices,” the she said.
The minister’s adviser recalled that speaking at the World Economic Forum in Davos five years ago, Azerbaijan’s President Ilham Aliyev put forward a solution meeting the interests of all oil producing countries.
“It was about involving not only OPEC, but also non-OPEC countries in the process of balancing the oil market and such an initiative was for the first time put forward by Azerbaijan. This initiative played an important role in setting up the OPEC+ format. As the author of this initative, Azerbaijan also constantly contributes to the implementation of the decisions adopted and continuation of OPEC+ cooperation. Azerbaijan has also insured integration of other non-OPEC countries to the organization,” noted Aliyeva.
She pointed out that as every oil producer, Azerbaijan’s main goal is to insure balance and stability in the market, which can be achieved not by being an OPEC member, but by demonstrating solidarity and cooperation.
“The true essence of integration into OPEC is to involve more oil producing countries in this process. During the discussions on the oil market, Azerbaijan also calls on other oil producing countries to join this process in the conditions of sharp decline in demand and volatility. Long-term cooperation with OPEC is ensured within the Charter of Cooperation by OPEC Member Countries and attending non-OPEC oil producing countries,” she concluded.
Azerbaijan has supported the extension of OPEC+ deal by the end of July.
The videoconference of OPEC and non-OPEC countries’ ministers decided to extend the deal to cut daily oil output by 9.7 million barrels by another month, till July 31.
It was agreed that the countries, which have failed to fully implement their obligations from May through June, will compensate this in July, August and September.
OPEC members will reduce daily oil production by 6.084 million barrels, while non-OPEC countries will cut their output by 3.616 million barrels per day.
Saudi Arabia, Kuwait and Oman will decrease daily oil production by additional 1.2 million barrels in June.
Azerbaijan should fulfill its obligation to cut oil production by 164,000 barrels in May-June by the end of July as well and keep crude production at 554,000 barrels per day.
---
Follow the author on Twitter: @Lyaman_Zeyn