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Azerbaijan joins process of regulating oil market until 2022

14 April 2020 17:24 (UTC+04:00)
Azerbaijan joins process of regulating oil market until 2022

By Ofeliya Afandiyeva

Azerbaijan will continue to contribute to the process of balancing the oil market by fulfilling its obligations to the OPEC + agreement from May, the Spokesperson of the Azerbaijani Energy Ministry and Advisor to Azerbaijani Energy Minister Zamina Aliyeva told local media.

She said that OPEC + agreement, supported by countries outside this format of cooperation, will allow removing 20 million barrels of oil per day from the market.

“Following a videoconference on April 12, OPEC + countries agreed to reduce oil production by 9.7 million barrels per day. In addition, major oil producers such as the United States, Canada, Indonesia, Norway and Brazil, having shown solidarity with OPEC + countries, voluntarily plan to reduce oil by 4-5 million barrels per day,” she said.

In addition, Aliyeva mentioned that considering that crude oil production in Iran, Venezuela and Libya will fall by 2.8 million barrels per day, the world oil market will receive a total of 20 million barrels less oil per day from May 1 as part of an initiative launched with OPEC + and supported by other countries.

According to the advisor, this is a huge contribution to the oil market and oil price stability.

She noted that according to the latest amendment to the "Declaration of Cooperation", the quotas for daily oil production in OPEC + countries will be set at 9.7 million barrels per day in May-June, 7.7 million barrels per day from July 1 to the end of the year and 2021 and 5.8 million barrels per day from January 2021 to April 2022.

Aliyeva also pointed out that Saudi Arabia, the UAE and Kuwait will not produce 2.7 million barrels of oil per day, which is planned in April.

“Following discussions lasting about 11 hours, the new “Declaration of Cooperation” was adopted at the 9th Ministerial Meeting of OPEC and non-OPEC countries in a video conference format, on the condition that Mexico will agree to the proposed volumes. It should be noted that the new “Declaration of Cooperation” envisages a three-stage reduction of daily oil production from the level of October 2018. However, in accordance with the “Declaration of Cooperation”, Mexico did not agree with the quotas set at these stages in the volume of 400-320-240 thousand barrels, respectively. Other "OPEC plus" countries, except Mexico, have reached an agreement to reduce daily oil production at various times and volumes,” the statement posted on the official website of the Energy Ministry said.

Addressing in the abovementioned conference Azerbaijani Minister Shahbazov said: “It is a fact that we can deal with the existing global problem not separately, but within global cooperation. In a short period of time from March to the present, we once again made sure that sustainable stability in the oil market is impossible beyond the limits of common responsibility, the regulatory process at the global level. The current situation and the uncertainty of the global economy, as well as of the restoration of global oil demand, necessitate further support for the oil market. It is very important to involve countries that are not members of OPEC + in this process.”

The minister also added that each oil country should demonstrate solidarity in order to stabilize the oil market. Azerbaijan, which plays an active role in the regulatory process within the OPEC +format, has supported the global oil market by taking on new obligations.

Finally, at the 10th (Extraordinary) OPEC and non-OPEC Ministerial Meeting was held via videoconference, on Sunday, 12 April 2020, under the Chairmanship of Saudi Arabia’s and Russia’s Ministers of Energy, all participating - 23 oil-producing countries signed the “Declaration of Cooperation” in order to reduce daily oil production in the world.

As reported earlier, no agreement was reached in the 8th ministerial meeting of OPEC and non-OPEC countries, which took place in Vienna on March 5-6, 2020.

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