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OPEC, Russia Closes Ranks, Target Stability As Oil Price Drops To $37 Per Barrel

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THE Organisation of Petroleum Exporting Countries, OPEC and Russian Federation, have closed ranks, targeted at achieving stability in the global oil market.

This was even as oil price dropped from an average of $40 per barrel recorded in early October 2020 to $37 per barrel currently because of the reoccurrence of the Coronavirus pandemic in many nations.

In their Seventh High-level Meeting – OPEC-Russia Energy Dialogue – hosted by OPEC, via videoconference on November 3, 2020, and co-chaired by HE Mohammad Sanusi Barkindo, Secretary-General of OPEC and HE Alexander Novak, Minister of Energy of the Russian Federation, OPEC and Russia emphasized the importance of cooperation among major stakeholders.

In a document – Seventh High-Level Meeting of the OPEC-Russia Energy Dialogue – obtained by DGN, OPEC stated: “The OPEC Secretary-General highlighted that the partnership with the Russian Federation has evolved into a permanent, transformative force-for-good in the energy market; one that has had a profoundly positive effect on the industry and the global economy.

“He also lauded the tireless efforts; wise counsel and strong support afforded the dialogue by HE Novak and said that he has become the reliable and dependable bridge between OPEC and non-OPEC.

“HE Novak noted the high significance that the Russian Federation places on the dialogue with OPEC. He also highlighted the Secretariat’s fundamental role in the success of the Declaration of Cooperation’s (DoC) realization under the leadership of HE Mohammad Sanusi Barkindo.

Both parties emphasised the strategic importance of the relationship between OPEC and the Russian Federation, not only at the bilateral dialogue level but also through the DoC and the Charter of Cooperation (CoC). This has been proven in 2020 with DoC participants embarking on the largest production adjustments, and for the longest period, in the history of the oil industry.

This helped counter the unprecedented shock to oil markets resulting from the COVID-19 pandemic and set them on a path to sustainable recovery. The Parties also noted the high levels of conformity to these production adjustments, the encouraging momentum they had brought to the oil market, and the knock-on positive effects on the global economy.

“However, both parties recognised that challenges and uncertainties remain, and stated that they continued to be steadfast in their commitment to helping rebalance the market and achieve sustainable stability. A balanced and stable oil market is a prerequisite for post-pandemic recovery, adequate investments, and future prosperity for consumers and producers alike.

“The OPEC-Russia Energy Dialogue continues to play a key role in reinforcing and enhancing the relationship between the two parties, which was underscored in the discussions at the meeting.

“OPEC presented on the impact of COVID-19 on global energy markets, in the short-, medium- and long-term, and provided an overview of recent developments in the CoC.  The Russian Federation presented on the Energy Strategy of the Russian Federation in the period to 2035, as well as on the Industrial Initiative on the Standardization and Certification of Oil and Gas Equipment as a potential vector of cooperation within the CoC.

“The Russian side also noted that Participating Countries in the CoC could through the engagement of oil and gas companies look into opportunities for further cooperation on the technological and economic fronts. The Parties expressed their strong interest in looking to potentially evolve this initiative within the CoC.”

It added: “Both Parties commended the active engagement of experts in research activities and expressed a common understanding to further these activities in research and analysis through the Dialogue, including through an internship, secondment program, and expert exchange on pertinent issues related to the global energy agenda. It was agreed that the next High-level Meeting of the OPEC-Russia Energy Dialogue will take place in 2021, if possible in person, and will be hosted by the Russian Federation in Moscow.”

OPEC considers Russia strategic as the nation holds over 80 billion barrels of proven oil reserves and 11.35 million barrels per day, mb/d.

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