Organization of the Petroleum Exporting Countries (OPEC) Secretary-General Haytham Ghaith speaks at the Asia Energy Summit on June 26, 2023.
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The secretary-general of the Organization of the Petroleum Exporting Countries said the influential coalition of producers was actively recruiting new members.
Asked whether he was trying to expand the OPEC alliance, Haytham Ghaith, the group’s secretary-general, told reporters on Wednesday: “I am, yes.”
The organization currently has 13 members, mainly in the Middle East, North Africa, West Africa and South America. The key question for the oil producer is how to reconcile the prospect of tighter crude supplies in the second half of the year with ongoing macroeconomic concerns and inflation concerns. OPEC members coordinate oil production to influence prices.
Ecuador withdrew from the group in 2020 for political reasons but was invited to rejoin OPEC in May, a letter from Ghais said Shared by the Ecuadorian Ministry of Energy.
The letter said: “The organization regards Ecuador as a top priority to rejoin the OPEC family.” Ecuador’s foreign ministry did not respond.
Argus declined to name the potential recruits. However, he referred to recent visits to oil-producing countries, including allies with which OPEC countries are currently pursuing a joint production strategy, known as OPEC+.
“I’m in Malaysia, I’m in Brunei,” he said, stressing that he did not necessarily invite the countries to join the group. “I’m in Azerbaijan, I’m in Mexico.”
Previous speculation about Guyana’s potential membership OPEC countries In late June, the South American country was not invited to join despite being an “emerging player with great potential in the international oil market.”
Asked about the requirements to become an OPEC member, Gass said: “They have to be a substantial net (oil) exporter, they have to have goals similar to OPEC’s. It’s all very clear in our regulations And I think many of the countries that I just mentioned actually fit that profile. So … the work is in progress.”
unanimous opinion
OPEC Secretary-General speaks to reporters after the OPEC Symposium in Vienna, where energy and oil ministers met the sidelines.
While no new policy was announced, ministers applauded OPEC+ members Saudi Arabia, Russia and Algeria for further cuts.
On Monday, Saudi Arabia announced it would extend a voluntary output cut of 1 million barrels per day initially planned in July until August, while fellow heavyweight Russia said it would cut exports by 500,000 barrels per day next month. Algeria also said it would cut production by 20,000 bpd in August.
The three countries and several other OPEC+ members announced a separate set of production cuts totaling more than 1.6 million bpd in April and have extended the cuts until the end of 2024.
Gass stressed that some of the voluntary production cuts implemented by OPEC+ did not indicate a divergence of policy views among members of the alliance.
“When people are able to sit down and pass an agreement with a clear vision all the way to 2025, I think that’s a sign of agreement,” he said.
“These are decisions of sovereign states. They are additional. We appreciate them … this does not imply in any way that there is division.”
Focus on investing
Echoing comments from other OPEC officials, Gass has also been advocating for joint investment in fossil fuel projects and renewable energy at the same time to avoid energy supply shortages. While he believes global hydrocarbons are underinvested, he said the OPEC alliance could still respond to any potential supply crisis.
“Part of the decision to cut production is also good because it gives us more spare capacity and OPEC always manages to act when there are any shocks around the world,” Gass said.
“I would say that spare capacity is tight…our countries are investing. When I talk about underinvestment, most if not all of our countries are investing…but it’s a global responsibility. OPEC can’t We alone take on this responsibility. We have to get everyone to come forward.”
United Arab Emirates Energy Minister Suhail Mazrouei similarly highlighted the focus on investment and availability.
“It’s not the price that’s important, it’s the level of investment going into the market to balance out the long-term or medium-term view of supply,” he told CNBC’s Dan Murphy on Wednesday. “If there’s anything that worries me, it’s supply in the medium to long term. Not need.”
The IEA foreshadowed a severe supply crunch in May, noting that “we expect a tighter market balance in the second half of the year, when demand is expected to exceed supply by nearly 2 mb/d.”