OPEC dares Trump over threat not to import from cartel
… Equatorial Guinea to join cartel
The Organisation of Petroleum Exporting Countries (OPEC) may be up against America’s newest President, Donald Trump, after the cartel’s two biggest suppliers to the U.S, Saudi Arabia, and Venezuela, took with a pinch of salt, a vow by Trump to end dependence on the group’s oil.
According to Saudi Arabia’s Energy and Industry Minister Khalid Al-Falih, the U.S will always need to import oil from OPEC.
Al-Falih said on Tuesday, that the U. S is “closely integrated into the global energy market”, while his Venezuelan counterpart Nelson Martinez said he expects his country’s crude exports to the world’s top consumer to remain stable.
“The positions that the U.S. and Saudi Arabia take in global energy are very important for global economic stability,” Al-Falih said at a meeting of producing countries in Vienna. He added that Saudi Arabia looks forward to working with Trump’s administration.
After his inauguration on Friday, Trump said he was “committed to achieving energy independence from the OPEC cartel and any nations hostile to our interests,” by exploiting “vast untapped domestic energy reserves”, according to a plan posted on the White House website.
The U.S. imported about 3 million barrels a day from OPEC last year, with Saudi Arabia and Venezuela accounting for 1.81 million.
Findings revealed that Trump’s threat to end oil importation from OPEC was not the first from a U.S president.
Former President George W. Bush promised to cut imports from the Middle East when he said in 2006 the nation was “addicted to oil.” Shipments from OPEC rose 10 percent during Bush’s time in office. Every U.S. president going back to Richard Nixon has pledged to reduce the country’s reliance on foreign oil.
Venezuela’s Martinez also shrugged off the fear that his country’s oil export to the U. S will stop under Trump’s administration. “The export volumes will be maintained,” he said. “There is a lot of interdependence in the world of energy. It’s good to maintain it for everyone’s good.”
Saudi Arabia exported an average of 1.08 million barrels a day of crude to the U.S. in 2016, while Venezuela shipped about 733,000 barrels a day and Iraq some 400,000 barrels a day.
OPEC is waiting for a new U.S. energy secretary to take office to learn more about Trump’s energy policies, Mohammad Barkindo, the group’s secretary-general, said in the Austrian capital.
According to Algeria, the U.S. is already reaping the goods from the price increase after OPEC agreed to reduce oil output in December.
“OPEC is currently helping the U.S.,” Noureddine Boutarfa said Saturday in an interview in Vienna. “The price recovery is helping U.S. companies, the U.S. industry, the U.S. economy.”
Crude prices rose to an 18-month high of more than $58 a barrel after the agreement to cut output.
However, prices have since slipped about 5 percent from that peak. The drop came through because traders await evidence both OPEC and non-OPEC will follow through with the agreement.
Meanwhile, OPEC now has a new member, Equatorial Guinea.
The country’s Ministry of Mines and Hydrocarbons announced that it has submitted its interest to join the Organization of Petroleum Exporting Countries (OPEC) in 2017.
Gabriel Mbaga Obiang, Minister of Mines and Hydrocarbons, travelled to Vienna on January 20 to meet with OPEC officials.
During the meeting, Obiang presented the Government’s offer to become the 14th member of the group.
With 32.5 million barrels per day of output projected this year, OPEC is the world’s largest organization of oil producers.
The Minister’s trip to Vienna follows the Fourth Africa-Arab Summit, which hosted last November several OPEC members in Malabo, under the patronage of President Obiang Nguema Mbasogo.
“For decades, Equatorial Guinea has achieved a sterling track record as a dependable supplier of petroleum to consumers in all corners of the world. We firmly believe that Equatorial Guinea’s interests are fully aligned with those of OPEC in serving the best interests of the industry, Africa, and the global economy,” said the Minister.
On December 10, 2016, Equatorial Guinea agreed to join 10 other non-OPEC countries to reduce 558,000 barrels per day of total oil production in 2017. Equatorial Guinea’s share of the cut is 12,000 barrels per day. Even through a two-year sustained slump in oil prices, Equatorial Guinea has maintained liquid output levels at a competitive level.
