DOHA: Qatar’s Minister of Energy and Industry H E Dr Mohammed bin Saleh Al Sada (centre), Saudi Arabian Oil Minister Ali Ibrahim Al Nuaimi (right), and Opec Secretary-General Abdullah Al Badri attend a seminar ahead of an Opec meeting in Vienna, Austria here the other day.
Vienna: The global oil market should be “more balanced” in the second half of the year, Qatar’s energy minister said yesterday before an Opec meeting widely expected to leave output unchanged.
“The last nine months or so have been particularly challenging for the oil industry,” Qatar’s Minister of Energy and Industry H E Dr Mohammed bin Saleh Al Sada said in Vienna ahead of tomorrow’s semi-annual meeting.
“However, there are a number of reasons to feel optimistic about the general situation going forward… There should be a more balanced market in the second half of this year.”
Al Sada, speaking at a two-day Opec seminar involving industry figures, said however that the market was “not out of the woods yet” and that “still a lot of uncertainty” remained.
At its last meeting in November, Opec’s 12 members, which pump around 30 percent of the world’s oil, kept its official production target of 30 million barrels per day.
This was despite a sharp fall in the price of oil and was seen as an attempt to maintain Opec’s share of a market flooded by a vast supply glut caused in part by the boom in US shale oil.
The strategy appears to have paid off, analysts say, with shale oil producers — which have higher production costs—squeezed and the oil price recovering in recent weeks.
Opec is set to carry on pumping oil nearly flat-out for months more, content that last year’s shock market therapy has revived demand and knocked back growing competition.
With oil prices having stabilised at around $65 a barrel, some $20 above their January lows, there’s little appetite within the Organization of the Petroleum Exporting Countries to modify production limits or address Iran’s request to give it more room in the market as sanctions ease.
“There is consensus among Gulf Opec countries, and others, to keep the ceiling unchanged,” a senior Gulf Opec delegate said late on Tuesday after an informal meeting of the four core Gulf Arab Opec members earlier in the day.
Iraqi Oil Minister Adel Abdel Mahdi said there was “optimism and general acceptance with the current situation”.
“Nobody wants to rock the boat,” the Gulf source said. “The meeting is expected to be smooth sailing.”
Opec Secretary-General Abdullah Al Badri said yesterday that it would likely be a brief meeting.
“Everything is very clear,” Badri said.
That marks a change in tone from Opec’s last meeting in November 2014, when Venezuela and others mounted an unsuccessful bid to convince Saudi Arabia and its Gulf allies to tighten the taps on supply.
Instead, Saudi Arabia laid out its new laissez faire approach, saying it will no longer consider cutting output without the cooperation of non-Opec producers such as Russia. This time, calls for collaboration have been muted as most ministers look forward to a more balanced second half.
“You can see that I’m not stressed, I’m happy,” Saudi Oil Minister Ali Ibrahim Al Nuaimi said on Monday.
There may still be some choppy moments. Iran is seeking to clear space for its gradual return to the oil market after years in which Western sanctions halved its oil exports to as little as 1 million bpd.
“If Opec members want to keep prices at the same level, we expect them to make room for Iranian oil,” oil minister Bijan Zanganeh was quoted as saying by Shana news agency.
