The head of OPEC said that the search for new members of the group of oil producers is underway
Haitham al-Ghais, secretary general of the Organization of the Petroleum Exporting Countries (OPEC), speaking at the Asian Energy Summit on June 26, 2023.
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The Secretary-General of the Organization of the Petroleum Exporting Countries signaled that the alliance of influential producers is actively expanding to recruit new members.
Asked if he was trying to expand the OPEC alliance, the organization’s secretary-general Haitham al-Ghais told reporters on Wednesday: “I agree.”
The organization currently has 13 members, mainly based in the Middle East, North and West Africa and South America. The threat for the group of oil producers is a battle between the prospect of tighter crude supplies in the second half of the year, current macroeconomic concerns and inflation concerns. OPEC members coordinate the amount of oil they produce in an attempt to influence prices.
Ecuador left the group in 2020 due to political circumstances, but in May was invited to rejoin the OPEC ranks, according to a letter from al-Ghais shared by the Ecuadorian ministry of energy.
“The organization considers its top priority to have Ecuador rejoin the OPEC family,” the letter read. The Ecuadorian ministry did not disclose its response.
Al-Ghais will not be drawn into disclosing the names of potential new members. However, he was referring to recent visits to oil-producing countries, including allies that are currently implementing a joint production strategy with OPEC countries, in a group known as OPEC+.
“I was in Malaysia, I was in Brunei,” he said, stressing that he did not necessarily invite these countries to join the organization. “I was in Azerbaijan, I was in Mexico.”
Previous speculation about Guyana’s potential membership saw OPEC country in late June that, while the South American country was “an emerging player in the international oil market with significant potential,” it was not invited to join.
When asked about the requirements to become an OPEC member, al-Ghais said: “They have to be a network. [oil] exporters, significantly, they must have the same goals as OPEC. All of this is mentioned very clearly in our bylaws. And I think many of the countries that I just named really fit this profile. So… the work is underway.”
agreed
OPEC Secretary General speaks to reporters after an OPEC conference conference in Vienna, where energy and oil ministers met on May 7. beside.
No new policy has been announced, but the ministers expressed appreciation for the additional oil production cuts by OPEC+ members Saudi Arabia, Russia and Algeria.
On Monday, Saudi Arabia announced it would extend its voluntary 1 million bpd cut originally outlined from July to August, while heavyweight Moscow said it would cut exports by 500,000 bpd. every day next month. Algeria also said it would reduce output by 20,000 bpd in August.
All three countries and several other OPEC+ members in April announced a separate series of production cuts totaling more than 1.6 million barrels per day, which they have extended until the end of 2024.
Al-Ghais emphasized that the voluntary cuts enacted by some OPEC+ do not show a split in the policy views of the alliance members.
“When everyone can sit down and pass a cross-cutting agreement with a clear vision to 2025, I think that is a sign of agreement,” he said.
“These are decisions of the sovereign state. They are complementary decisions. We appreciate them… That doesn’t imply division.”
Focus on investment
Echoing the comments of other OPEC officials, al-Ghais also advocated joint investment in fossil fuel and renewable energy projects simultaneously, in an effort to avoid a deficit in energy supply. Despite what he sees as global underinvestment in hydrocarbons, he says the OPEC alliance can still resolve any potential supply crisis.
“Part of the decision to reduce production is also good because it gives us more spare capacity and OPEC is always looking to act in the event of any global shock,” al-Ghais said. “.
“I would say spare capacity is tight… And our countries are investing. When I talk about underinvestment, most of our countries, if not, are. all, are investing… But it’s a global responsibility. OPEC can’t shoulder this on its own. We have to have everyone step up.”
Suhail al-Mazrouei, the energy minister of the United Arab Emirates, also emphasized the focus on investment and supply capacity.
“It’s not the price that matters, it’s the level of investment in the market to balance the supply in the long-term or medium-term,” he told CNBC’s Dan Murphy on Wednesday. “If there’s one thing that worries me, it’s what worries me, medium- and long-term supply. Not demand.”
The International Energy Agency in May heralded an intense supply crunch, noting that “the tighter market balance we anticipate in the second half of the year, when demand is expected will exceed supply by nearly 2 million bpd.”
