Omani minister says OPEC needs deal
Oman’s oil minister has voiced frustration at the inability of oil producers to come to a decision on how much crude they are producing.
Mohammed bin Hamad Al Rumhi said OPEC has “not been using common sense” when it came to making decisions.
The 14 members are pumping about 33 million barrels per day, which has created an oil glut and kept prices below $50 per barrel.
This is in contrast to mid2014, when prices were more than $100 per barrel.
Al Rumhi told delegates at ADIPEC that the crisis has not been well handled.
He said: “OPEC has not been making decisions using common sense until now. In fact, whenever OPEC held a meeting, oil prices fell down – maybe OPEC should not hold a meeting at all.”
He added that common sense on a deal is “prevailing slowly at OPEC”.
Al Rumhi added: “We have failed to be proactive and are not proud of how the market has panned out. Our intervention to address the By Mahak Mannan issue so far has not been enough. We are playing with fire, economies can be destroyed in certain countries.” OPEC members have repeatedly failed to agree on output. This is in part because Iran, which has only just seen sanctions lifted after decades, wants to boost its economy.
Later this month in Vienna members will discuss a 700,000 barrel per day cut in production.
Oil analyst Robin Mills, CEO of Dubai-based Qamar Energy, said: “OPEC has been talking a lot about actively cutting and freezing production since April, but there really has not been any action. If a firm agreement does come into place – and the countries stick to it – it will bring a lot of stability in the market and address the issue of oversupply.”