Nigeria and other participating oil-producing countries across the globe reduced the global supply of crude oil by 1.6 billion barrels since May this year, the Organisation of Petroleum Exporting Countries has said.
OPEC’s Muhammad Barkindo, disclosed this during a videoconference of the Crescent Ideas Forum with the theme, ‘The Outlook on Energy’.
In his address, which was made available to our correspondent in Abuja on Tuesday, the OPEC boss said the reduction in crude oil supply was taken in the interest of consumers, investors and global economy.
He said, “Since May, the production adjustments undertaken by the participating countries have helped reduce the global supply by around 1.6 billion barrels, a truly impressive feat given the economic uncertainty overshadowing the industry.
“I would like to stress that these efforts were undertaken not just for the good of the DoC (Declaration of Cooperation) participating countries, but in the wider interests of consumers, investors and the global economy in general. There can be no recovery without market stability, and no one stands to benefit from volatility.”
In April, OPEC delivered an unprecedented response to an unparalleled market shock, by adjusting output down by 9.7 million barrels per day or roughly 10 per cent global demand at the time.
These efforts were spearheaded by leaders of major world oil producers and further supported by the G20, in the spirit of solidarity, at the group’s Extraordinary Energy Ministerial Meeting on April 10, 2020.
In June, the DoC re-affirmed the importance of these contributions to overall market stability and full participation in the agreed adjustments.
In addition, the participating countries agreed to a fair and effective compensation mechanism for those who were unable to achieve 100 per cent conformity in the first months of the agreement.
“These provisions stand out as a remarkable acknowledgement of both the commitment by these countries to support the market, and the scale of the challenge,” Barkindo stated.
He added, “There is no doubt in my mind that these decisive and proactive efforts helped put the oil market back on stable footing.
“In doing so, the DoC provided much-needed support to the global economy as it began to pick up steam in the third quarter of this year.”
Barkindo observed that OPEC members began this year on an optimistic note, optimistic about the global economy and healthy oil market growth.
He, however, stated that OPEC’s 2020 vision did not foresee the devastating impact of the coronavirus, the deadly toll it had taken across the world, nor the blow it had dealt to many economic sectors, especially crude oil.
He said, “In this respect, our OPEC outlook for 2020 oil demand is now slightly above 90 million barrels per day.
“This represents a sharp decline of nearly 10 million barrels per day from where we started the year, and almost an 11 million barrels per day contraction compared to what we forecast for the year back in January.”
Barkindo added, “In 2021, we expect growth to bounce back to 6.2 million barrels per day, to just over 96 million barrels per day, compared to our pre-coronavirus expectations for demand reaching almost 102 million barrels per day next year.”
He explained that the recent revisions were due to the easing pace of the economic recovery and recent COVID-19 containment measures, which were assumed to impact transportation and industrial fuel demand well into next year.
