No one wants volatility in global crude market, says Al Rumhy

Al Rumhy’s comments follow a year of consistent attacks by the Trump administration on OPEC, with the US President blaming the organisation for high oil prices

Times News Service

MUSCAT: No stakeholder wants volatility or instability in global oil markets, according to Oman’s Minister of Oil and Gas Dr Mohammed bin Hamad Al Rumhy.

In a wide-ranging interview with CNBC International, the minister said, “I think nobody wants volatility. I am sure President Trump doesn’t want volatility because it is difficult to manage. It doesn’t matter who you are, whether you are the CEO of ExxonMobil or a farmer in Mozambique, to go and see the price of the litre of fuel that you are buying keep changing everyday, how do you plan? I know it is a tough task to try and smooth that volatility, but that is one of the objectives. I am convinced that there is an honourable and good intention behind all the initiatives happening in this industry.”

In reference to Donald Trump’s continued attacks on the OPEC, Al Rumhy added, “Sometimes, maybe, he hasn’t been fair. I’m sure he has good intentions too. He thinks he is representing the people of the US and he thinks this is the way to do it, and we think what we are doing is the way to do it; I wish we could sit together. I would be honoured to sit with him and exchange ideas.”

Good intentions

“Of course, I can’t do that,” he said. “But I guarantee you that he has good intentions and so do we and the best way is to sit together and see where the problem is and how we can really have a convergence of our philosophy. A body was created a few years ago in Riyadh called the International Energy Forum, and the intention was to bring people together, which happened a few times. It was driven by the US administration at the time, and major producers, and we used to meet. I think they still meet from time to time to sit and see what is good for energy supply and energy trade and meet demands and investments and planning, so we can make this world a better place.”

Al Rumhy’s comments follow a year of consistent attacks by the Trump administration on OPEC, with the US President regularly blaming the organisation on Twitter for high oil prices. In a pattern that predates his administration, tweets from Trump as far back as 2011 accuse OPEC of inflating oil prices.

In 2011, he tweeted, “Oil is starting to rise again despite the horrible times. OPEC continues to rip us off. Not worth $30. New leadership needed.”

Throughout 2018, Trump had tweeted, urging OPEC to lower the price of oil.

In April 2018, he stated, “Looks like OPEC is at it again. With record amounts of oil all over the place, including the fully loaded ships at sea, Oil prices are artificially Very High! No good and will not be accepted!”

By November, his tone had changed. “Oil prices getting lower. Great! Like a big Tax Cut for America and the World. Enjoy! $54, was just $82. Thank you to Saudi Arabia, but let’s go lower!”

Oman, Al Rumhy stated, was also not in favour of sanctions against Iran, which will also impact the market.

Ties with Iran

“I think the world knows Oman’s position when it comes to Iran,” he explained. “I think it’s a bit unfortunate to keep the policy of isolating Iran. If we do have problems with Iran, if we do have problems with anyone, Oman has always propagated a policy of engagement and talks and discussion rather than isolation and sanctions.”

“As you know, Oman was a key player in bringing about the agreement, the 5+1, and now to see that agreement being torn apart, we are a little bit disappointed to say the least,” he said in reference to the Iran Nuclear Deal.

“The United States is a very good friend of Oman, Iran is a very good friend of Oman, we like both countries,” he continued. “We like our neighbours. We have a good relationship with everybody. And we don’t really enjoy discussing further isolation and mechanism(s) to widen us apart, we like to talk about bringing us together.”

“But from a business point of view, it creates yet another uncertainty in

our business,” Al Rumhy added.

Waiver

“We don’t know what will happen six months from that waiver, whether we need to have more oil in the market, maybe a million or half a million may come in or be withdrawn from the market. It may cause a ripple here or there, something that many of us, if not all of us, are trying to avoid.”

Tensions in the Gulf, which have led to more security measures, restrictions and threats, according to Al Rumhy, affected ordinary people the most.

“Things like ‘enhancing security’, ‘additional security’, ‘bringing another fleet’, ‘closing the Strait of Hormuz’, disrupting flow, disrupting travel—these are not good—it’s not good for us, it’s not good for the world community, and most importantly, it’s not good for the common people,” explained Al Rumhy. “People just want to wake up in the morning, go to work, and live their lives. And these are the people who are impacted and we often forget that when you do this, when you move in this direction, people think that maybe the President or the ministers or the heads of state will be restricted, really, it’s just the opposite, it’s the people, ordinary people, who just want to have a good life with their families, with their friends, and these are the worst part of this equation.”

Al Rumhy’s comments come as Secretary of State Mike Pompeo’s arrived in Oman on Monday. Pompeo is currently touring in a number of the US allies in the region.