The Organisation of Petroleum Exporting Countries (OPEC) is seeking an early resolution between the United States (U.S.) and Iran and Venezuela.
The oil cartel said easing the tension will help stabilise the volatile oil industry.
“For us we will welcome a resolution of the issues that are at stake between these countries and the U.S. sanctions distort markets and further complicate our efforts with non-OPEC members to maintain stability,” OPEC’s Secretary-General Mohammad Sanusi Barkindo said.
Both Iran’s and Venezuela’s production woes have contributed significantly to the cartel’s over-compliance to the group’s production cut quota, with Iran’s crude production falling from an average of 3.813 million barrels per day in 2017 to 2.370 million barrels per day in May 2019, and Venezuela’s crude production falling from 1.911 million bpd on average in 2017, to an abysmal 741,000 bpd in May, this year.
But while the two countries combined seemingly did OPEC a favour by taking more than 2.6 million barrels of crude oil per day out of the market within that time frame, the tensions in the Persian Gulf and the dire situation in Venezuela are creating a market that OPEC is finding it difficult to both predict and manage.
Though OPEC is hoping—but not holding out for—a swift resolution to two of its founding members’ production problems, the issue is not OPEC’s main concern. OPEC called out last climate activists as “perhaps the greatest threat to our industry going forward,” Barkindo said, taking specific aim at the “school strike movement” as well as climate campaigners.
Authored By: Akinola Ajibade
SOURCE: THE NATION