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13 Jan 2021

OPEC participates in the 11th Gulf Intelligence ‘Global’ UAE Energy Forum

Vienna, Austria, 13 January 2021--OPEC Secretary General, Mohammad Sanusi Barkindo, participated via videoconference in the 11th ‘Global’ UAE Energy Forum, which focused on the 2021 oil and energy outlook.

The forum was held under the patronage of HE Suhail Al-Mazrouei, UAE’s Minister of Energy and Industry, and organized by Gulf Intelligence.

The Secretary General took part in a Q&A session that focused on the current oil market situation and the prospects for the Declaration of Cooperation (DoC) and world oil demand in 2021. The session was moderated by Bloomberg’s Manus Cranny.

Barkindo emphasized that the year 2020 offered many lessons and it was vital to take stock for the year ahead. He noted, however, that “the worst is over” and he was “hopeful and cautiously optimistic going forward.”

The Secretary General recalled the outcome of the 13th OPEC and non-OPEC Ministerial Meeting held in early January, emphasizing that the decisions taken were balanced and reached through consensus, determination and flexibility in the interests of oil market stability.

Barkindo stated: “We had two days of intensive discussion on market developments. We came to the consensus that we should not bring back 2 mb/d.” It underscored, he added, “our step-by-step approach.”

The Secretary General also underscored the leadership role being undertaken by Saudi Arabia with its additional 1 mb/d voluntary adjustment for February and March to help the market navigate the traditionally low demand first quarter.

The Secretary General highlighted a number of key inter-related variables that need to fall in line for the market to return to a sustained balance. These were “vaccines, lockdowns, fiscal and monetary stimulus, DOC production adjustments, GDP growth and oil demand rebound.”

He said that all these variables need to be monitored “very closely, and it was vital that OPEC and its non-OPEC partners keep their hand on the steering wheel, to help drive the recovery in 2021.”

In looking at current inventories, he said that “regardless of the heroic efforts we have undertaken, stocks are still high,” adding, “we look at both the OECD and non-OECD stocks, and both are high.” He stated that we “need to see them further reduced and the DoC was assisting the market in accelerating the stock drawdown.”

On the possible re-emergence of shale oil, the Secretary General said: “There is no doubt that all producers of hydrocarbons have suffered from the impact of COVID-19,” adding that OPEC has established a channel of communication with the US independent producers. He added: “US producers are not insulated from this haemorrhage.”

The Secretary General also highlighted the importance of investment. “Even prior to COVID-19, we were put on the defensive [side],” Barkindo said, adding that oil and gas will continue to be part of the energy basket”, citing OPEC’s World Oil Outlook 2020. He added: “Investment is the lifeblood of this industry and is vital to meet future demand.”