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Oil producing nations should get used to living in a world of US$60 a barrel oil, because US$80 oil is unlikely in the current market environment, Oman’s Minister of Oil and Gas, Mohammed bin Hamad Al Rumhy, told Russian news agency TASS in a recent interview.
“Every producer needs $80 per barrel compared to $60, but is it reasonable? Probably not, not in the current circumstances. We need to move with the current economic environment. I would enjoy seeing oil grow from $60 to $80, but it is highly unlikely,” Al Rumhy told TASS in Abu Dhabi this week.
Gulf oil producer Oman is not a member of OPEC, but it is part of the non-OPEC group of producers led by Russia that have joined the cartel in the production cut pact to reduce global oil oversupply and prop up prices.
According to economists, Oman needs oil prices at around US$85 to balance its budget.
OPEC and allies have managed to put a floor under oil prices, but the current levels of just above US$60 per barrel Brent Crude are way below the reported breakeven price for OPEC’s de facto leader and largest producer, Saudi Arabia–around US$80 a barrel.
Earlier this week, Al Rumhy said in Abu Dhabi that Oman would like to see oil prices rising to US$70 a barrel, as carried by Reuters.
On Monday, the Omani oil minister said it was too early to assess if the current state of the market called for deeper cuts from OPEC and its partners.
The Joint Ministerial Monitoring Committee (JMMC) of the OPEC and non-OPEC countries that are part of the deal is meeting in Abu Dhabi on Thursday to take stock of the oil market and the OPEC+ coalition’s efforts to erase the glut and prop up prices.
The committee could discuss adopting new metrics to monitor the state of the global oil market and its balance, OPEC’s Secretary General Mohammad Barkindo said earlier this week. The group will discuss the slowing global oil demand growth, Russia’s Energy Minister Alexander Novak said on Wednesday.
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.