MOSCOW, Jun 3 (PRIME) -- The OPEC+ oil output cut agreement has already influenced the energy market positively, bringing back stability, but full recovery from a slump triggered by the coronavirus pandemic should not be expected earlier than in 2022, Equatorial Guinea’s Minister of Mines and Hydrocarbons Gabriel Mbaga Obiang Lima said in an interview with PRIME released on Wednesday.
“The OPEC+ agreement was a very important initiative, we believe it has been influencing the market indeed. But we make effort to cope with a very important problem, falling demand, which has hurt the crude price a lot. We monitor the situation, the June meeting is approaching, but we still worry about a long road ahead… from my point of view, it is premature to speak about a full balance of the market earlier than in 2022,” he said.
The OPEC+ alliance has managed to reach a very important goal, stability of the market, the official added.
“We do not want very high prices or very low prices, we need stability, because we can perform better budget planning then,” he said.
The OPEC+ states reduced crude oil production by over 10 million barrels per day in May although many participants’ contribution was forced, Obiang Lima said.
“The initial idea was to cut production by 10 million barrels per day, and I should say, we have made the reduction, and even more. Some did it voluntarily, and some were forced because of reasons, linked not to oil production, but to another important factor, a difficulty to sell oil on the market,” he said.
“Some states including Saudi Arabia, the UAE, Kuwait and some others, have definitely cut production by larger volumes than they were required,” he added.
There is no need in prolongation of production reduction by 9.7 million barrels per day beyond July, the restrictions should be eased in line with the April agreement, Obiang Lima also said.
The minister is sure that the U.S. presidential election and a possible second wave of the coronavirus disease will become the key milestones for the global oil market in the nearest future.
The market should get accustomed to an oil price of U.S. $30 per barrel in 2020, Obiang Lima added.
In April, the OPEC+ countries agreed to reduce their oil production by 9.7 million barrels per day in May–June, by 7.7 million barrels per day in July–December, and by 5.8 million barrels per day from January 2021 through April 2022. Russia’s share in the reduction will amount to 2.5 million barrels per day in May–June. The agreement is valid until April 30, 2022, but the members will revise its prolongation in December 2021.