Opec sees need to retain oil supply deal

Bloc’s secretary-general wants arrangement made permanent in the face of headwinds facing crude

Opec needs to keep working with other oil producers to manage global supplies as demand for crude faces “headwinds,” the head of the organisation said.

The historic supply deal between Saudi Arabia, Russia and other producers reached in late 2016 needs to become permanent, Mohammad Barkindo, secretary-general of the Organisation of Petroleum Exporting Countries, said on Sunday in an interview in Dubai.

Oil demand is “robust,” though crude use “is beginning to face some headwinds,” he said, without elaborating.

“There is no viable alternative on the table other than to institutionalise and make this cooperation between ourselves and our good partners from nonOpec in a permanent fashion,” Barkindo said. Low crude prices hit the oil industry and starved it of investment, leaving continued cooperation among producers as they only way to maintain stability in markets, he said.

Crude is averaging about $72 (Dh264) a barrel this year, and the International Energy Agency warned last week that prices could rise above $80 a barrel unless producers make up for lost supply from Opec members Iran and Venezuela.

While trade disputes and financial woes in some emerging markets threaten to erode crude demand, the IEA, a watchdog of the industry, said that supply risks outweigh those concerns.