Nigeria's minister of state for Petroleum Resources, Dr. Ibe Kachikwu has disclosed that the Organization of the Petroleum Exporting Countries (OPEC) is shifting mood from mistrust to a growing consensus on how to end the global oil price rout.
Recall that oil prices have slumped by more than 70 per cent to near $30 a barrel over the past 18 months as OPEC, led by top producer Saudi Arabia, sought to drive higher-cost producers out of the market by refusing to cut production despite a supply glut.
The price crash has crippled some economies that depend heavily on oil sales for income, such as Nigeria and Venezuela, and even Saudi Arabia is shoring up its resources to withstand the painful revenue drop.
“There’s increased conversation going on. I think when we met in December … they (OPEC members) were hardly talking to one another. Everyone was protecting their own positional logic,” Nigerian oil minister Emmanuel Ibe Kachiwku told Reuters in an interview.
“Now I think you have cross-logic … they are looking at what are the deficiencies, what is the optimum.”
Struggling oil producers have made repeated calls for an emergency OPEC meeting, but Kachikwu said that the timing had not been right. The cartel’s next regular meeting is in June.
“We haven’t been sure that if we held those (emergency) meetings that we could actually walk away with some consensus,” Kachikwu said.
“A lot of barrels are tumbling out of the market from non-OPEC members, so the Saudi philosophy is obviously working. But it’s not influencing the price higher, which means that whether we like it or not some barrels are coming in from … members and non-members to cover whatever is dropping out,” Kachikwu added.
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