Some non-OPEC members allied with OPEC in the oil production cuts could become official members of the cartel in the future, the UAE's Energy Minister Suhail Al Mazrouei said on Tuesday.
"There is definitely a willingness and a wish to expand OPEC," Al Mazrouei said, when asked if non-OPEC oil producers that are cutting production in coordination with the 14-member cartel could join OPEC eventually.
"It would have been difficult to try to rebalance the market alone and so I think there is a rationale for this group to stay together… and maybe even expand," the UAE's minister said at the Abu Dhabi International Petroleum Exhibition Conference (ADIPEC), as quoted by CNBC.
The non-OPEC group of producers-led by Russia-has pledged to take 558,000 bpd off the market, which, combined with OPEC's 1.2-million-bpd cut, is removing close to 1.8 million bpd off the market as the cartel and its partners in this deal are trying to prop up oil prices and shrink high global oil inventories.
Apart from Russia, the other countries that have pledged support to the cuts are Azerbaijan, Bahrain, Brunei Darussalam, Kazakhstan, Malaysia, Mexico, Oman, Sudan, and South Sudan. Since the pact was sealed in December last year, Equatorial Guinea has become an OPEC member.
"A new chapter is being authored in the history of the industry by OPEC and its non-OPEC partners, who continue to demonstrate the power of cooperation and dialogue to restore stability and growth in the global oil market," OPEC Secretary General Mohammad Barkindo said in a speech at ADIPEC on Monday, praising-as always-the extraordinary partnership.
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Barkindo also said that the cuts were the "only viable option" to stabilize the oil market, while Al Mazrouei said that OPEC and its non-OPEC partners were expected to unanimously decide to extend the production cuts at the Vienna meeting on November 30, but the duration of the extension was still under negotiation.
The cartel is said to be leaning toward a nine-month extension of the cuts to the end of 2018, and the market is already pricing this in to some extent, but in recent weeks there has been speculation as to whether the cartel and its allies will decide and communicate a firm decision for extension at the meeting at the end of this month.
True to its traditions, OPEC will probably keep the market guessing until November 30.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More
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