The world oil market is expected to reach full stability in 2018, following the anticipated reduction of the level of inventories to a comfortable level, according to Suhail bin Mohammed Faraj Faris Al Mazrouei, minister of energy and industry in the UAE
To achieve stability, the industry needs to renew or extend the deal further, he stated in an interview with the special edition of the OPEC bulletin prior to the first anniversary of 'Declaration of Cooperation.'
The ‘Declaration of Cooperation’ was a landmark decision by OPEC and non-OPEC oil producers at the joint ministerial-level meeting in Vienna on 10 December 2016.
Speaking about the importance of the ‘Declaration of Cooperation’ for medium-and long-term oil market prospects, Al Mazrouei said that it gave hope and stability to the market at a very critical time, especially when the non-OPEC oil producers showed commitment in compliance with the ‘Declaration of Cooperation,’ which was a testimony to their efforts toward market stability.
While replying to a question about how the oil market and the global economy would have been looking like today but for the deal, he said, “The market was at risk of staying imbalanced for a longer time in oversupply mode, which could lead to dropping of investors' confidence in the sector.”
“That lack or delay of investment in the upstream oil sector could lead to another shortage of supply in the future when demand outpaces declining supply, which will lead to a sudden oil price hike that could slow down the world economy,” he further noted.
Al Mazrouei remarked that the deal was a historical achievement, as it demonstrated the commitment of OPEC and non-OPEC countries to achieve market stability.
Al Mazrouei was elected as president of the OPEC conference for one year during the OPEC Ministerial Meeting on 30 November 2017, to come into effect from 1 January 2018.
