By Leman Mammadova
Azerbaijan supports the proposal of the OPEC+ monitoring committee on the extension of the deadline to reduce oil production.
On July 1, at the 15th meeting of the Joint Monitoring Committee of Ministers of the OPEC+ member countries in Vienna, it was proposed to extend the deadline for executing the "Declaration of Cooperation" to reduce oil production without changing the existing quotas for another 9 months.
Speaking at the meeting, Energy Minister of Azerbaijan Parviz Shahbazov said that the country supports the proposal to extend the agreement.
Shahbazov stressed that over-fulfillment of obligations under the “Declaration of Cooperation” adopted by OPEC and non-OPEC countries in December 2018 prevented a sharp drop in oil prices. A price margin has also been formed that meets the interests of both producers and consumers.
The minister also pointed out that the tendency for a decrease in oil prices is again observed since late May. There is a large amount of oil on the market despite forecasts for global oil demand growth of 1.14 million barrels this year compared with 2018.
“Oil reserves in the Organization for Economic Cooperation and Development (OECD) countries continue to grow. In the coming years, the global oil market supply is also expected to exceed demand. Therefore, by continuing regulatory measures, it is necessary to extend the agreement on the limitation of oil production,” Shahbazov said.
The proposal to extend the deadline for reduction of oil production for another 9 months will also be discussed at the 176th meeting of the OPEC Council of Ministers. The decision is expected to be made at the 6th meeting of the ministers of the member states and non-members of OPEC on July 2.
In his speech, Shahbazov also noted that in May and June, Azerbaijan fulfilled obligations to reduce daily oil production by 20,000 barrels in the framework of OPEC+. In his words, the average daily oil production was carried out at 125 percent in the first half of 2019.
The world’s major oil producers reached a deal to reduce oil production by 1.2 million barrels per day at the 5th OPEC and non-OPEC Ministerial Meeting in Vienna on December 7, 2018. It was agreed to reduce daily oil production by 0.8 million barrels per day (2.5 percent) for OPEC countries in the first six months of 2019. Non-OPEC countries agreed to reduce oil production by 0.4 million barrels per day (2 percent). The agreement came into force on January 1, 2019.
Azerbaijan also supported the decision to reduce oil production and joined the agreement to support the process of world oil market regulation. As part of the agreement, Azerbaijan reduced daily production by 20,000 barrels since January 1, 2019.
The country agreed to cut daily oil production to 776,000 barrels as part of the OPEC+ agreement. The average daily oil production reached 793,000 barrels in January, 806,000 barrels in February and 798,000 barrels in March and 683,000 barrels in April.
It is noteworthy that the average daily oil production in Azerbaijan amounted to 792,600 barrels in 2018.
Leman Mammadova is AzerNews’ staff journalist, follow her on Twitter: @leman_888
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