OPEC and its allies remain united in their goal of stabilizing the oil market, UAE energy minister Suhail al-Mazrouei said Oct. 2, ahead of a meeting of the group’s key advisory committee.
“We are diverse 22 partners, but our aim and goal is one, which is trying to attain to that balance,” he said in an address to the Gulf Intelligence Energy Markets Forum in Fujairah. “The critical element is that this group is staying together.”
The OPEC+ alliance has implemented several rounds of production cuts, including a “voluntary” reduction of 2.2 million b/d by eight countries, including the UAE, which the group aims to begin tapering in December.
However, slumping oil prices challenge the group, with many forecasters expecting a market glut in 2025, as demand growth may not keep pace with supply expansion from rival producers outside OPEC+.
The tapering has already been delayed once, from October, with crude prices stuck in the low $70s/b.
Platts, part of S&P Global Commodity Insights, assessed Dated Brent at $75.38/b on Oct. 1, up 3.41% on the day due to rising geopolitical tensions between Israel and Iran.
The OPEC+ Joint Ministerial Monitoring Committee, on which Mazrouei sits, is scheduled to meet online on Oct. 2 at 12:00 UTC to assess member compliance with quotas and review market outlooks, while the full alliance is set to meet in Vienna on Dec. 1.
In the long term, Mazrouei expects global oil demand to continue rising and emphasized that the industry must keep pace with investment to meet the world’s needs.
OPEC’s most recent World Oil Outlook projects demand rising to 120.1 million b/d by 2050 from 102.2 million b/d in 2023, with no peak demand in the forecast period and states the industry will need to invest approximately $17.4 trillion.
This conflicts with assessments by other forecasters, including the International Energy Agency, which reiterated in September its view that oil demand would peak before the end of the decade.
“If I am worried about one thing, it’s the level of investment that I don’t see coming to fulfill medium- to long-term requirements for the world,” Mazrouei said. “The world’s population is expanding. Demand is solid. Without investments — not just upstream, but also midstream, refineries, and trading — we will face a chokepoint,” the UAE energy minister added.
Source: Platts