We positively assess the joint actions since 2016
They allowed us to return investments and restore confidence in the industry
This is a strategically longer period for planning our activities
The most difficult meeting for OPEC+ was the one in March 2020, when countries couldn’t reach consensus on how to proceed with the collective oil supply at the start of the pandemic, Novak told Rossiya 24.
A month after the deal collapsed and Russia and Saudi Arabia were in a price war in March and early April 2020, the OPEC+ members realized that they need to cut a massive amount of oil production in order to bring the market back to balance while demand and prices were crashing with the pandemic.
OPEC+ is still unwinding those 10 million barrels per day (bpd) total cuts, by easing them by 400,000 bpd every month.
Earlier in December, the group surprised many market observers by sticking to its plan to ease the production cuts in January by 400,000 bpd, despite mounting evidence of a larger-than-expected oil surplus early next year.
OPEC+ may have brought more stability to the market, but investments post-COVID are still lagging behind pre-pandemic levels, industry officials and analysts warn.
Upstream oil & gas investment must rise to the pre-pandemic levels of around $525 billion per year through the end of the decade so that the industry can ensure a demand-supply balance, Saudi Arabia-based International Energy Forum and IHS Markit said in a report this week.
This year, upstream investment is still depressed, for a 2nd year in a row, and is estimated at around $341 billion, they added.
OPEC Secretary General Mohammad Barkindo warned the audience at the World Petroleum Congress this week that cutting investments in oil and gas production is misguided.
Insufficient investment in new oil and gas supply would lead to energy shortages, as well as market imbalances and higher prices, Barkindo added.
Author: Tsvetana Paraskova