Suhail al-Mazroui, Energy Minister of the United Arab Emirates, recently stated that there is serious interest in adding more members to OPEC, the 14-member oil and gas cartel.
As part of OPEC’s effort to reduce global stockpiles, its members have collectively reduced output over the last several months along with a few other participating countries. When asked whether or not those non-OPEC countries that are currently participating in the supply cuts could eventually join the group officially, al-Mazroui replied: “There is definitely a willingness and a wish to expand OPEC.”
“It would have been difficult to try and rebalance the market alone and so I think there is a rationale for this group to stay together…and maybe even expand,” he added.
Currently OPEC is in the midst of detailing an extension of the production cutting deal which has already been extended once through March of 2018. This would prolong the agreement between OPEC and the nine other participating oil-producing nations which keeps 1.8 million barrels a day off the market.
The extension will be discussed at a meeting between OPEC and the other participants of the scheme in Vienna, Austria on November 30th.
The nine non-OPEC members include Russia, Azerbijan, Bahrain, Brunei Darussalam, Kazakhstan, Malaysia, Mexico, Oman, and Sudan.
“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,” said OPEC secretary General Mohammad Barkindo on Monday.
However, if OPEC does take on new members it is unlikely to be Russia. As recently as March 2017, Russia Energy Minister Alexander Novak reiterated that Russia is not considering joining OPEC at a conference in Houston. Despite their current cooperation and shared tactical interest, Russia sees OPEC as a competitor first and foremost.
“OPEC and Russia do not trust one another. We are competitors, not partners” said Gleb Gorodyankin, editor of the oil market division at Thomson Reuters.
Equatorial Guina, the third-largest oil producer in Africa, is the most recent addition to OPEC, who joined in May of this year.
Article written by HEI contributor Kevin Abbott.