The head of OPEC talks about production cuts, price fluctuations, Russia’s war in Ukraine and its effect on oil prices.
The ministers of the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, will meet online on February 1. The meeting takes place as oil prices rise to $90 per barrel. Al Jazeera’s Fidelis Mbah in Abuja, Nigeria, spoke with OPEC President Gabriel Mbaga Obiang Lima – who is also Equatorial Guinea’s hydrocarbon minister – about the issues facing the organization. Pieces have been edited for clarity.
FM: Are you taking any steps to increase production or will you stick with the recently announced production target cuts?
Lima: I think the approach that we’re taking from the institutions is to observe and watch, and why I say it’s observation and observation is because there’s a lot of uncertainty going on in the market. In the market, everything changes by the week, by the month, by the day, and what we do is keep an eye on what’s going on in the market. I will give you the best example. China’s opening. Another example is the conflict between Russia and Ukraine. So really, all of those things are factors that we put together and once we do that, it’s time for us to evaluate what we need to do.
We would like to remind you, one thing that OPEC does not control is prices. What OPEC does is make sure supply and demand are stable. Therefore, it is very important that we monitor, monitor and ensure that consumers… always receive the product. So at this point to say that the quota will increase or decrease, it is really irresponsible to do so. Let’s have the data first, let’s see what happens through the new opening of China, let’s see our future expectations for the product and then from there we can make a decision. as a block.
FM: So does this mean that the issue of oil production policy will be discussed in the meeting of OPEC’s Joint Ministerial Oversight Committee on February 1?
Lima: What I’m saying isn’t that it won’t show up. There are many factors we need to take into account, including that key members of OPEC such as Venezuela, Iran, and Libya have many [challenges] with production, you know one day they’re in production and another day they have a problem. So before that meeting, we have an internal meeting to evaluate such things.
The way we look at it at this point, the world needs oil to be able to keep growing, to be able to keep growing, so we need to make sure we can keep the supply going. And these are not just OPEC members. These are also non-OPEC members and others. We’ll keep an eye on what’s going on, we’ll have a meeting before the February meeting, and for that February meeting, we’ll make a decision on what we’re going to do. But at this point, the view is that there are more requests for this product than ever before. So obviously we need to make sure that we can continue to supply the market. This product is much more necessary for economic recovery than to limit it.
FM: Then why does the US accuse OPEC of cutting production in favor of Russia?
Lima: OPEC is not a political organization. Second, OPEC is not in conflict with anyone. What OPEC does is collect information about the producer and we collect information about the consumer and then OPEC makes a rational decision. It is not political. It is not about favoring one country or another. So when people say that we favor one and the other, it is really irresponsible. That’s not true, and obviously, we’re taking care of the consumer at the same time because you have to remember the one thing that everyone wants is a stable product.
When you have product stability, you can manage the economy better. We want stability. If you have stability at $20, $80, $100, that’s what you want in the longer term because it’s something you can manage. So any question of whether OPEC is against this or that is really just speculation. You have to remember one thing, speculators are traders. That’s really the key for those who want to create all that volatility in price. OPEC doesn’t want volatility. OPEC is there to evaluate the data, and whatever the data tells us, it’s time for us to act.
FM: How did the Russo-Ukrainian war affect the energy sector and the world economy?
Lima: I am the president of OPEC but also the president of the Gas Exporting Countries Forum (GECF) so obviously this is oil and gas. We have made our impact in the gas sector but also in the oil sector. The problem is that some people think that it is very easy to replace production from one country to another. so they can say OK I’m not buying from this. I will buy from the next one. But what they forget is that many of us, the manufacturers, have signed long-term agreements and some of those long-term agreements are very dear and loyal customers to us.
So when in Europe, for example, they say we want oil, we want gas, we say OK, first we have long-term customers in Asia that have been paying for all these years. , so you tell us to take that product . So we’re asking them to sign a long-term contract just like other customers.
But what we want as a manufacturer for a long time is that they provide investment. This is what we keep saying when people say you should stop investing in fossil fuels. It has an impact on our production. If you want stability in the economy, we need to invest back in fuel.
I think for all of us, all members of OPEC, the solution is peace. The solution is not war because we need to create stability. In all these matters, the only thing that is clear is volatility and we don’t want volatility. We want stability because in fuel stability you can invest through peace, you can grow and you can grow. Obviously, it affects us. Also because Russia is the main supplier of refined products like diesel. So Russia’s inability to ship its diesel affects everyone. Our main message is that peace is the solution. The sooner we have a resolution to this conflict, the better we can create stability and continue to grow and create better jobs.
