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Ecuador to have minimal impact on OPEC’s output levels

Oil&Gas Materials 18 May 2023 10:07 (UTC +04:00)
Ecuador to have minimal impact on OPEC’s output levels
Laman Zeynalova
Laman Zeynalova
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BAKU, Azerbaijan, May 18. The invitation of Ecuador to rejoin OPEC was expected, as the cartel always wants to have more members, while it also improves its overall standing within the Latin American block, Cyril Widdershoven, a Middle East geopolitical specialist and energy analyst, a partner at Dutch risk consultancy VEROCY, and Global Head Strategy Risk at Berry Commodities told Trend.

“In how far this has been done with economics and production capacity in mind is to be assessed. Until now, Ecuador's overall production is minimal, so it is not going to contribute to a stronger OPEC position, but could be linked to OPEC+, in which Russia is for sure not unhappy to have some Latin American parties be part of that alliance. Keep in mind its right-wing president is under pressure, so maybe some additional push for the opposition powers,” he said.

Widdershoven went on to add that at present, Ecuador's crude oil production is around 521,000b/d, which is up 8% on 2022.

“The impact will be minimal, as it is under pressure from all sides. For OPEC, a 500K bpd producer is not significant, just the optics. It could be constraining possible hard-needed international investments, as an OPEC member you need to comply to agreements that influence production and export volumes directly,” the expert added.

OPEC Secretary General Haitham al-Ghais has extended an invitation to Ecuador to rejoin the producer group, more than three years after its departure. The official letter, addressed to Ecuador's Energy Minister Fernando Santos and dated May 12, emphasized OPEC's view of Ecuador's return as a significant priority, highlighting the potential benefits it would bring to the South American country. The letter, which was made public by the Ministry of Energy, signifies OPEC's recognition of Ecuador's importance and its willingness to foster a mutually beneficial relationship.

"Ecuador is an important oil producer and exporter, and the secretariat believes that your esteemed country would greatly benefit from the information and knowledge that Opec shares with its member countries, as well as the possibility of strengthening diplomatic ties with like-minded oil producing countries," the letter said.

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