Abu Dhabi: Failure to implement the deal reached at Algiers in late September by oil producers will bring negative consequences to an already-fragile oil industry, said Mohammad Barkindo, secretary general of the Organisation of Petroleum Exporting Countries (Opec).
Speaking on Tuesday at the Abu Dhabi International Petroleum Exhibition and Conference (Adipec), Barkindo said the market was now in the midst of a slow but steady process of rebalancing.
He warned, however, that a failure of Opec members and non-Opec countries to cooperate and follow the Algiers deal will “further elongate this period of very low growth, this period of instability in the market and will put forward further [elongate] the rebalancing process.”
“I remain confident that the message has sunk. The consequences are clear and the experience of the past two years also has been noted and learned,” Barkindo said.
He added, “Without sounding as a prophet of doom, I think there’s a convergence of views, not only within the producer group — meaning Opec and non-Opec — but you have also heard from consumers and the IOCs (International Oil Companies) that failure to implement the Algiers accord in full and timely fashion will, of course, bring some negative consequences on the already fragile state of the industry.”
His statement comes after oil producers committed at a meeting in Algiers in late September to cut oil production to around 32.5 million to 33 million barrels per day. Following the meeting, however, countries including Iran, Libya, Nigeria, and Iraq asked to be exempted from the production cuts leaving analysts and investors to question the credibility of the deal.
