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OPEC and its non-OPEC allies could sign in June a pact to make their oil market-managing policies formal, Suhail Al Mazrouei, the energy minister of one of OPEC’s largest producers, the United Arab Emirates (UAE), said on Wednesday.
“When we meet in June hopefully we are going to be finalising [the charter],” Al Mazrouei said in Abu Dhabi today, as carried by The National.
“The draft is almost finished for us here in the UAE. All of the countries have provided their comments. The draft is almost ready,” the UAE minister noted.
The charter is ready and has been sent to different countries to look at it, Al Mazrouei said, adding that questions remain regarding when and where it could be signed and who would actually be signing it.
OPEC has sought for months to institutionalize its partnership with the Russia-led alliance of non-OPEC producers with which it has been managing oil supply since January 2017.
In June last year, Saudi Arabia’s Energy Minister Khalid al-Falih said at a joint OPEC/no-OPEC panel meeting that in order to deal with the challenges and complexities of the oil market balances, “we need to build upon our successful cooperation model and institutionalize its success through a broader and more permanent strategically focused framework.”
The December OPEC+ meeting in Vienna also committed “to build on the success achieved thus far, through further institutionalizing the framework for regular and lasting cooperation under the draft Charter of Cooperation between Oil Producing Countries, which was endorsed in principle and to be finalized and ratified by the participating countries.”
Russia, however, signaled at the end of 2018 that formalizing the alliance may not be such a good idea. OPEC and non-OPEC oil producers are highly unlikely to create some kind of a formal joint organization for managing the oil market due to the additional bureaucracy and to the risk of falling prey to a proposed U.S. legislation that could open the cartel and allies to antitrust lawsuits, Russia’s Energy Minister Alexander Novak said at the end of December.
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.