OTTAWA: After months of negotiations and uncertainty, the world’s largest oil producers agreed late last year to curb global oil production in 2017. The deal, reached between OPEC and non-OPEC states, comes after two years of over-production that pushed global oil prices into a downward spiral.
And while it was not a party to the agreement, Canada may have a lot to gain from the slowdown, especially as Saudi Arabia, the main producer in the Organization of the Petroleum Exporting Countries, cuts production.
“I think Canada is going to be one of the winners to walk away from all of this,” said Samir Madani, co-founder of TankerTrackers.com, a website that tracks seaborne oil tankers and barrels, and government oil statistics.
“Because they are not in the agreement and they are the single largest supplier to the United States, they are the lifeline to the US, in that regard,” Madani told Middle East Eye. “Canada is growing more and more efficient when it comes to energy.”
Signed in Vienna on 30 November, the OPEC countries are to cut 1.2 million barrels of oil per day (bpd) starting in the new year. Oil prices immediately jumped as a result, as did the currencies of some large oil-producing states, Bloomberg reported.
About a week later, non-OPEC countries also entered into an agreement with OPEC – the first since 2001 – to slash their own production by 558,000 bpd.
“This agreement cements and prepares us for long-term cooperation,” Saudi Arabia’s Energy Minister, Khalid al-Falih, told reporters after the December meeting.
As the largest exporter in OPEC, Saudi Arabia is expected to cut as much as 486,000 bpd from the overall OPEC output reduction, according to Reuters. Russia, meanwhile, is expected to cut 300,000 bpd.
“It’s now as of January 1 that they should all start cutting back, those who agreed to it. How much they will cut is up to them, but as long as they reach within the six-month period what they’ve committed to, then that’s the target,” Madani said.
