Image: African Mining Market
Your Royal Highness, Excellencies, distinguished delegates,
It gives me great pleasure to welcome you to the 181st Meeting of the OPEC Conference.
I would like to begin by congratulating our esteemed colleague, His Excellency Bijan Namdar Zanganeh, who will be taking a bow from his post as Minister of Petroleum for the Islamic Republic of Iran. You have provided noble leadership, wise counsel and technical knowledge to the OPEC Conference for many years, and have been instrumental in our Organization’s many achievements.
OPEC has also benefited immensely from your leadership and vital contributions to the Declaration of Cooperation from the very beginning in 2016, and notably in April 2020 when the Participating Countries reacted decisively to the global collapse of oil demand resulting from the COVID-19 pandemic. As the longest serving OPEC Minister, your wisdom and experience will be deeply missed. It has been an immense pleasure to work with you, and I wish you and your family good fortune in the years to come.
Also at this time, I would like to welcome His Excellency Dr. Mohammad Abdullatif Alfares, the Minister of Oil and Minister of Higher Education of Kuwait, and His Excellency Bruno Jean Richard Itoua, Congo’s new Minister of Hydrocarbons, to their first meetings of the Conference. We wish both of you great success and look forward to our work together. On behalf of all of OPEC, I thank your predecessors for their contributions to the Conference and tireless work on behalf of the Organization.
Allow me to also use this opportunity to congratulate our esteemed colleague, His Excellency Timipre Sylva, Minister of State for Petroleum Resources, on the occasion of Nigeria’s upcoming 50th anniversary as an OPEC Member Country. This golden milestone provides an opportunity to reflect upon Nigeria’s rise as a global energy supplier and partner; its pivotal support for oil market stability; and its contributions to expanding OPEC’s cooperation with other producing and consuming countries. I wish you a Happy Golden Anniversary!
The celebration of another milestone is in the works – the 60th anniversary of OPEC, which was postponed last year due to the pandemic. I thank His Excellency Ihsan Abdul Jabbar Ismaael and the Government of Iraq for all the planning that has gone into the commemoration on September 30th in the Organization’s birthplace – Baghdad. By waiting an extra year, we are looking even younger and more fit! The OPEC Secretariat is working closely with the Organizing Committee in Baghdad to midwife a befitting celebration.
Excellencies, distinguished delegates, I am in the very fortunate position of opening this meeting of the OPEC Conference today at a time of rising hope and optimism. In the seven months since the last OPEC Conference, the global economy has shifted from reverse to forward gear. Global growth is now expected at 5.5% this year – from a contraction of 3.4% in 2020. The outlook for worldwide oil demand is also moving in the right direction, and is now on course to grow by six million barrels per day (mb/d) in 2021, after its turbulent 9.3 mb/d decline last year. The latest OPEC Monthly Oil Market Report projects a strong rebound of oil demand in the second half of the year, putting us within striking distance of pre-pandemic levels in the fourth quarter.
The story of this improving market outlook would not be complete without recognizing the leading role played by the Declaration of Cooperation. Today begins the third month of the step-by-step upward production adjustments the Participating Countries agreed to undertake at the start of April. The market continues to welcome these prudent and forward-looking steps to support sustainable stability, which in turn provide crucial backing for the economic recovery. We will continue to remain proactive and vigilant in our actions on the back of our commitments and the success of the widely acclaimed Declaration of Cooperation.
I would also point out the important role the oil industry plays in ensuring the distribution of vaccines by supplying fuel needed for transportation. Additionally, many of the medical supplies and protective clothing, as well as equipment essential in the fight against COVID-19, are produced using petroleum-based products.
Throughout our efforts to provide the world with a secure and stable oil supply, we have benefited from the leadership of HRH Prince Abdul Aziz Bin Salman, Saudi Arabia’s Minister of Energy, as Chair of both the OPEC and non-OPEC Ministerial Meetings and the Joint Ministerial Monitoring Committee. Together with the Co-Chair, Alexander Novak, Deputy Prime Minister of the Russian Federation, they have guided us through one of the most difficult chapters in the oil industry’s history. We look forward to the continued leadership of this ‘dream team.’
I would also like to underscore the importance of Saudi Arabia’s additional voluntary adjustments, including those in February, March and April, which have reinforced and reaffirmed our overall efforts to keep the market on the road to recovery. Equally important, these generous contributions provided a window of opportunity for Participating Countries that needed extra time to make up for overproduction. Looking beyond the two-year duration of our April 2020 production adjustment roadmap, it will be important to carry on with the Declaration of Cooperation and our diligent monitoring efforts to avoid any potential for a large supply overhang developing in 2022.
Allow me to also thank our tireless Secretary General and the staff of the OPEC Secretariat. Mr. Secretary General, you kept our ship on course as we navigated the stormy seas of 2020, and you continue to keep us headed in the direction of recovery. The staff deserve special recognition for the consistent quality and timeliness of the research, analysis and other services you provide to Member Countries.
Altogether, the herculean efforts of the past 15 months have contributed enormously to the Organization’s reputation as a strong and trusted partner. Indeed, our contributions to sustainable oil market stability have been recognized repeatedly from the highest policymaking levels; from the executive suites of leading international oil companies; by consuming nations; and by numerous other energy stakeholders.
Excellencies, distinguished delegates, we have experienced many false dawns during this pandemic, and though we meet today at a time of rising hope and optimism, this is no time to lower our guard. The coronavirus continues to take a painful toll, with thousands of lives still being lost every day. The presence of the new Delta variant and the recent surge in case numbers in India, along with other Asian countries, Latin America, the U.K. and most recently Russia and Africa, are a grim reminder of the uncertainties that still loom over us.
The pandemic is not the only concern flashing on our radar screen. The record levels of fiscal and monetary stimulus that have helped shore up economies and drive the recovery come with heavy baggage – high debt levels and the potential for inflationary spikes that could in turn erode progress in the oil market. It is important to remember that many countries do not have the financial firepower to stimulate growth. They will continue to need international support so that the recovery is both durable and global.
Looking further down the road, we face uncertainties arising from policy measures, investor activism and litigation that could have a detrimental impact on the ability of our industry to invest in production, technology and human capacity. These potentially exclusionary policy and investment actions – which are mostly being shaped by some developed countries – risk not only our oil and gas industries, but the ability of our Member Countries to achieve their social and economic development ambitions.
Another issue of utmost concern is energy poverty, which disproportionately affects many countries here in Africa. Our continent needs continued access to our valuable indigenous energy resources, including oil, to keep pace with current needs while closing the gulf that separates the energy haves and have-nots. The coronavirus is a vivid reminder that energy access must remain at the top of the agenda during the climate deliberations later this year in Glasgow.
In closing, I would like to turn back the pages of time to the 176th OPEC Conference and the 6th OPEC and non-OPEC Ministerial Meeting. Two years ago, on July 2, 2019, we unanimously endorsed the Charter of Cooperation along with our Declaration of Cooperation partners. In total, delegations from more than 30 oil-producing countries gathered at the OPEC Secretariat in Vienna for that historic event. Today, the Charter stands out as an example of our Organization’s forward-looking leadership and the timeless importance of dialogue, cooperation and respect among all nations.
Under the umbrella of the Charter of Cooperation, the OPEC Secretariat is preparing the First Ministerial Roundtable on Energy, Climate and Sustainable Development for oil-producing countries, which is scheduled to take place on September 6th. In preparation for the Ministerial Roundtable, OPEC is organizing the 4th Technical Workshop and the 19th Coordination Meeting on Climate Change, both of which are taking place next week.
Thank you, and I look forward to another successful meeting of the OPEC Conference.
