Baku, Azerbaijan, July 26
By Elena Kosolapova – Trend:
OPEC influence on the world oil market and oil prices is much less significant than some other global and regional events, professor of economics in the US National Defense University, Adjunct Professor in Georgetown University and energy analyst Paul J. Sullivan believes.
“OPEC's power over the market is less than it was. What happens in the shale gas fields and companies of the US, the world economy and certain regional economies, and what political, diplomatic and military events happen in the oil regions could prove to be far more important than OPEC pronouncements and behavior in the near, medium and long terms,” Sullivan told Trend by email, commenting on the OPEC deal on oil output cut.
The expert noted that OPEC has some internal tensions that always bring doubt to what will happen with such an agreement, adding that the situation with Qatar is just one of many tensions.
Sullivan expects that the participants of OPEC deal likely to say they want to extend it after its expiration in late March 2018. Meanwhile he noted that in the past, cheating in the OPEC has been more of the norm, and not just at the margins at times.
This week a Joint OPEC-Non-OPEC Ministerial Monitoring Committee held a meeting in St. Petersburg to review the June 2017 report as well as the first six months of the Declaration of Cooperation.
After the meeting the cartel announced that OPEC deal producing countries had achieved a conformity level of 98 percent in June 2017. Same level of high conformity was observed for the first six months of January to June 2017.
Between January and June 2017, the participating producing countries adjusted their production downwards by an estimated volume of 351 million barrels, OPEC said.
Sullivan noted that he always has some doubts about such data, given their political nature , and how opaque the details are to get to those calculations.
İn late 2016 OPEC agreed to slash the output by 1.2 million barrels per day from Jan. 1, with top exporter Saudi Arabia cutting as much as 486,000 barrels per day. Non-OPEC oil producers such as Azerbaijan, Bahrain, Brunei, Equatorial Guinea, Kazakhstan, Malaysia, Mexico, Oman, Russia, Sudan, and South Sudan agreed to reduce the output by 558,000 barrels per day. The agreement was for six months period, extendable for another six months.
In May, all the participants of last year's agreement agreed to extend it to another nine months.