The United Arab Emirates Energy Minister stressed that there was no intention to cancel the organization.
The United Arab Emirates Energy Minister on Monday warned that the world would face chaos when Opec was dismantled and blamed the current volatility of oil prices on geopolitical issues, concerns about global trade war and currency fluctuations.
Mrs. Suhail bin Mohammed Faraj Faris Al Mazrouei at Adipec 2018 Abu Dhabi's first panel hearing said that it was not the first time people had raised the question of Opec's existence and this was emphasized in the 1970s and 1980s.
"Opec has developed a lot over the years if it was not a good and well-functioning organization, I doubt it would be so long. Without us (Opec) it will be hard to come up with the energy sector investments and it will be messy, we have seen this chaos in a certain place , we have sometimes reduced production to ensure that the market is not over-supplied, we invest and maintain those capacities for the day when the world calls us to supply raw materials, "Al Mazroui said.
He stressed that there was no intention to cancel the organization. In fact, he said it is likely that some friendly country will join him and the group will be bigger.
"It's a boat that says you can just get rid of Opec, but it's worse that Opec is not there," he said.
Oil prices rose by more than 1 percent on Monday after Saudi Arabia's oil exports dropped by 500 thousand barrels in December due to seasonal lower demand, and would lead in Opec to offset the price.
Brent's annual futures rose 80 cents a day to $ 70.98 a barrel of 1205GMT, while US oil futures rose 36 cents to $ 60.69 a barrel.
Khalid Al Falih, Saudi Arabian Energy Minister, has previously denied that there is a plan to break up Opec and the group will remain a long-standing global oil bank for oil.
The Wall Street Journal on Thursday announced that a think tank sponsored by Saudi Arabia is studying the effects of Opec's disintegration on oil markets.
"Opec is essential to the stability of the oil markets," he said, adding that the think tank was just trying to "think outside the box" and analyzed all the scenarios, but added that Riyadh had "no reason to exclude Opec".
Indian Oil Minister Dharmendra Pradhan said their experience with Opec is very good.
"It was the 1970s when these issues were discussed, Opec is no oil-producing club but is now also interested in the interests of consumers." Opec is happy with our opinion, "Pradhan said during a panel discussion.
Need to reduce 1mbpd
Al Falih said that according to the technical analysis, it is necessary to reduce oil supplies by 1 million barrels per day, as demand will decrease during the slowdown expected in the global economy. This also helps balance the balance between supply and demand.
Saudi minister announced on Thursday that Riyadh will reduce delivery of 0.5 million barrels a day in December.
"If everything remains the same and almost certainly will not happen as things change, then the technical analysis we saw yesterday showed that there is a need to reduce the supply of one million barrels in October," Falih said.
"The consensus is that we have to do everything we need to balance the market, if it means we can reduce the supply of one million (bpd), we will."
Al Mazroui blamed geopolitical issues, trade war concerns and currency fluctuations for oil price volatility.
"Fluctuations in oil prices are a consequence of market conditions and other conditions that do not fall within the scope of our industry, such as geopolitical challenges and the risks of global trade war." We need to create market conditions to ensure that this is beneficial for producers and consumers. healthy world economic growth, "Al Mazroui said.
"Sometimes the markets are over-responsive and we can not control the steps or decisions taken by the Heads of State, so we will continue to do our part and keep Opec together," he said, adding that Opec is not a greedy organization that focuses on a price but on balance market.
He warned that if oil prices were too low to produce nations, they would stop investing in the energy sector, as it did in 2014-2015 when oil prices fell sharply.
"We have seen trillions of dollars in investments due to very low oil prices."
ERROR: missing macro / ad / dfp-ad-article-new!
MORE from the Khaleej Times
The Israeli bus was hit by a fire in the Gaza Strip. READ MORE
According to emergency officials, the fire has also blown up the neighbor … READ MORE
Brent stock futures rose 70 cents by 70.88 USD per barrel by 1605GMT, … READ MORE
The National Meteorology Center recommends residents … READ MORE