UAE Energy Minister and OPEC president Suhail Al Mazrouei has said the US shale oil industry is not a threat to OPEC member countries.
Speaking at an event in London on Tuesday February 20th, 2018, Al Mazrouei who heads the cartel of oil producing countries, cautioned fellow OPEC member countries not to repeat past mistakes of flooding the market with oil to the extend that prices fall resulting to massive job losses.
A glut in oil supply caused global oil prices to plummet from mid-2014 to 2015. Al Mazrouei said OPEC plans to meet United States shale oil producers in the US next month when they will explore the outlook for shale, rather than relying solely on analysts’ reports on the industry.
He further outlined the commitment of all 24 OPEC and non-OPEC countries, including Russia, to cutting oil production by 1.8 million barrels per day until the end of 2018, as per their last November’s agreement.
“We are focused on what we agreed on in 2017, which is to work together to balance the market,” Al Mazrouei noted. He also refuted suggestions of talks with some countries about an exit strategy from the deal saying for the time being they are focused on one target, which is to balance the oil market.
Al Mazrouei said he would love to see OPEC and non-OPEC oil producers to continue to work together beyond 2018 so as to ensure market stability as their job is yet to finish.
Al Mazrouei noted that commercial oil stocks in the Organization for Economic Cooperation and Development (OECD) countries have fallen by more than 220 million barrels since the beginning of last year, compared to the five year average, he said.
There remains a further 100 million barrels to remove from the market to reach the five year OECD inventory average. Al Mazrouei confirmed there were plans for an alliance of the 24 non-OPEC and OPEC producers, but he refused to give details while the plans were still in draft form.
Al Mazrouei is hopeful that the alliance would not only be based on benefiting members, but also to safeguard world economic growth.
Al Mazrouei also observed the need for oil producing countries to have the necessary capacity in place to help deal with any shocks to the market.