Russian Energy Minister, Alexander Novak, has said he expected the Secretary General of the Organization of Petroleum Exporting Countries (OPEC), Nigeria’s Mohammed Barkindo, to propose that non-OPEC nations consider joining the group in limiting output.
Novak said this in an interview with Turkey’s state-run Anadolu Agency, published on the Russian Energy Ministry’s website on Sunday.
“We are waiting for the proposals which Barkindo (OPEC), will elaborate internally to meet target (production) levels and with which they will come out and approach non-OPEC nations,” he said.
The causes of the declining price per barrel of oil, has been traced to the strong U.S. dollar, OPEC, oversupply, declining demand and Iran nuclear deal.
The current free-fall in oil prices is drawing comparisons with the “bubble bursting” crash of 2008.
“While decline in demand was the key driver for the 2008 crash, the sharp drop in prices this time around is being caused by a supply glut. Continued growth in U.S. shale production and increase in non-OPEC countries oil exports have led to excess capacity,” Tarun Dang, managing partner with Trend-Wise Capital Management, wrote in a note to clients.
Rising global tensions are not helping to boost oil prices: “The impact of this increased U.S. oil production is quite immense, that unlike in the past, geopolitical tensions have been unable to push oil prices higher,” Dang wrote.
As a result, prices have been halved in less than a year, such that people have not witnessed since the last global recession.
Many oil executives believe it will take years before oil returns to $100 per barrel.
OPEC agreed to cut production, ending two years of Saudi Arabia’s pump-at-will policies.
Saudi Arabia retaliated with excesses after U. S increased pumping of its shale oil, leading to drop in price.
OPEC would reduce output to a range of 32.5-33.0 million barrels per day.
The cartel estimates its current output at 33.24 million bpd-production to be reduced to around 700,000 bpd.
However, stakeholders are of the opinion that not just non-OPEC countries, Russia should be made to partake in the cuts. Others like the U. S who initiated the oversupply, should also be made to join the cuts to boost prices.


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