Baku, Azerbaijan, Aug. 14
By Kamila Aliyeva – Trend:
Saudi Energy Minister Khalid Al-Falih's comments about increasing oil production cuts are largely rhetorical, Arthur Berman, petroleum geologist and energy expert, told Trend.
“The Minister is saying that countries participating in the cuts have the ‘capability’ and ‘option’ to increase the levels. He does not, however, indicate whether there have been any discussions about deeper cuts or that there is even support for such an action,” he said.
Furthermore, expert recalled that, the compliance rate to current cuts for OPEC is only 75 percent and for non-OPEC – only 67 percent, according to IEA.
“Talk of increasing cuts, before showing compliance with existing cuts, will not win market’s confidence. I see progress toward market balance, partly as a result of the production cuts, but a show of unity and resolve at this time is important,” he added.
Earlier, Saudi Arabia’s Minister of Energy, Industry and Mineral Resources Khalid Al-Falih said that OPEC and non-OPEC countries party to the output cut agreement can consider the possibility of increasing the production cut quota, which currently stands at 1.8 million barrels per day.
On May 25, OPEC member countries and non-OPEC parties, Azerbaijan, Kingdom of Bahrain, Brunei Darussalam, Kazakhstan, Malaysia, Mexico, Sultanate of Oman, the Russian Federation, Republic of Sudan, and the Republic of South Sudan agreed to extend the production adjustments for a further period of nine months, effective from July 1, 2017.
Current reductions will be based on the same terms as those agreed upon in November.