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OPEC Secretary General: World will continue to need oil going forward

Mohammed Barkindo in an interview with TASS during the Russian Energy Week spoke about the meeting with Russian President Vladimir Putin, the commitment of the deal to cut production of all OPEC+ participating countries, the growth in demand for all sources of energy, and the decarbonization of the economy
OPEC Secretary General Mohammed Barkindo AP Photo/Ronald Zak
OPEC Secretary General Mohammed Barkindo
© AP Photo/Ronald Zak


- Your Excellency, you have met with Russian President Vladimir Putin. What is the outcome of the meeting? Was it successful for you?

- Thank you very much for your question. We had a very fruitful conversation with President Vladimir Putin. It is always a great honor and distinct pleasure to meet with the president, to whom we hold very high esteem in OPEC and indeed in the OPEC+ group. He had been a consistent supporter of our cooperation with non-OPEC producing countries led by the Russian Federation, and he continuously provided the leadership that we seriously need especially in the current geopolitical circumstances that we find ourselves in. So by large it was a very productive meeting. I left the meeting in very high spirit that will continue to benefit from this leadership and from his support to quest for market stability.

- As we know you have discussed what happened in Saudi Arabia at the beginning of September. Do you think Russia can play a special role in Middle East issues?

- There is no doubt that the president has more than political gravitas and leverage not only in the Middle East but globally as an astute statesman and a leader. We look upon him to use his good offices in helping us to reconcile some of the differences that exist between some of our member-countries in the interest of stability and peace to the extent that we can remain committed as oil-producing countries in OPEC and OPEC+ to continue to take the necessary and proactive decisions in maintaining stability in the market in the interest of all.

- Are you concerned about falling oil prices? Do you think OPEC+ needs to deepen cuts at the December meeting in order to stabilize the market?

- I believe it is premature at the moment taking into account that we just came out of our 16th meeting of the joint OPEC and non-OPEC ministerial monitoring committee in Abu Dhabi. We have just entered into the fourth quarter of the year and are looking forward to our end-of-year conference in December. Therefore we will continue to focus on the full implementation of the supply adjustments. The JMMC reiterated in Abu Dhabi the necessity of full compliance to the supply adjustments by all participating countries in the Declaration of Cooperation. The numbers in Abu Dhabi if I recall were in the region of about 136% conformity, thus well over 100%. But a few countries still have difficulties in reaching their full conformity, yet we have received reassurances by these countries to improve their conformity levels

- Do you think that Iraq and Nigeria will achieve 100% compliance in October due to the situation in Saudi Arabia when some countries had to increase production?

- I am not aware that people adjusted or increased their production levels in the aftermath of the unfortunate incidents in Saudi Arabia. To the contrary, our member-countries remain faithful to their own obligations and they remain confident the Kingdom of Saudi Arabia was more than capable of restoring supplies. So there is no evidence any of our member-countries has tried to take advantage of this unfortunate situation.

- So do you expect 100% compliance in October from Iraq and Nigeria?

- I am confident that the conformity levels of OPEC+ group will continue to build up beyond the 136% that was reported in Abu Dhabi towards the end of the year.

- Yesterday we saw the statement from the Ecuadoran ministry saying it is going to leave OPEC in January 2020. Are you concerned that the second country is going to leave OPEC over the last year? Do you think OPEC is losing its role?

- I was surprised when I received the correspondence from Quito because Ecuador has always been a very strong and valuable member of the organization. I had the honor of visiting Ecuador two years ago and meeting with the new leadership who expressed their continuous support to OPEC. It was therefore a surprise to me and I believe to others.

- Do you think that struggling with the climate change is threatening for the oil market, for oil? Do you think the oil sector is getting in trouble because of those actions?

- The oil industry must be part of the solution to climate change. The challenge we are facing is that of rising carbon emissions are the result of various industrial activities, and not only oil or gas. Reasons are historical emissions as well as current emissions. The challenge is how to harness appropriate technologies supported by policies of national governments as well as corporate decisions, to combat climate change through the deployment of these technologies such as the carbon capture utilization and sequestration technologies for the oil sector. 

The world will continue to need all sources of energy going forward. The projections according to OPEC World Oil Outlook to 2040 is 33% growth in energy consumption, in terms of oil – about 14 mln barrels a day growth leading to almost 112 mln barrels a day by 2040. The world is already crossing the 100 mln barrels a day consumption level. No source of energy will satisfy the current demand, let alone the projections for future demand.

The rise in projections of nearly 1.6 bln people coming into this world by 2040 together with the current energy poverty in most developing countries where people have no access to electricity, billions have no access to clean cooking fuels, all this means that the transition should be comprehensive, all these sources of energy are required, including oil and gas. The world should focus on how to decarbonize these sources of energy and to facilitate unfitted access to energy by all peoples of the world.

- Then why oil prices are falling if the world needs crude?

- Market volatility is not new, in today’s world the market is also affected by factors outside the realm of supply and demand, and our commitment in the declaration of cooperation of the participating countries is to jointly work together to maintain stability in oil prices. It is an ongoing process, it is becoming increasingly challenging because of these non-fundamental factors that come to bear on the market. But I remain confident that the relative success we have had in the last three years since we started the implementation of the declaration of cooperation will continue going forward.


Interviewed by Julia Khazagaeva at the Russian Energy Week Forum