OPEC stopped 1.3bn barrels supply to raise oil price, says Barkindo

The Secretary-General , Organisation of Petroleum Exporting Countries (OPEC), Dr. Sanusi Barkindo, has said the international organisation stopped 1.3 billion barrels supply to raise oil price.

He also noted the role played by the Declaration of Cooperation (DoC), the group’s framework for supply stability, in stopping an excess crude oil volume of 1.3 billion into the market in the year, 2020.

Speaking at the S&P Global Platts Americas Petroleum and Energy Conference, he noted that in 2020, the oil and gas sector lost about 30 per cent of its capital expenditure in the upstream as a result of the global oil market crisis.

Barkindo, also posited that the DoC brought together 23 oil-producing countries to stabilise the market.

He pointed out that the OPEC’s declaration helped the sector to traverse two historic downturns and ushered in a new era in global energy cooperation.

Barkindo, however, averred that during the 2014-2016 oil sector downturn, the industry recorded half a million jobs, estimated at $1 trillion in investments frozen or deferred.

Barkindo buttressed that the diligent and coordinated response through voluntary production adjustment decisions, which was taken by the DoC helped to rebalance the market, restore stability and also revive the sector.

“I am sure each and every one of us can recall the dire situation the industry was in, which was most dramatically illustrated on 20 April 2020 when the price of WTI went negative. It was a visceral day, and one often described as ‘Black Monday.’

“It was a time when the industry faced a potential crude oversupply of nearly 1.3 billion barrels. There were even deep concerns that some storage hubs could actually reach tank tops.

“Thankfully, this never came to pass, in part due to the decisive actions of the DoC. Since then the DoC has shown great courage and flexibility and has adapted as and when necessary to changing market dynamics, particularly with the post-summer advent of second and third waves of Covid-19.

“We also realise our work is not done. We have our eyes firmly fixed on 2021. It is clear the recovery has been fragile and uncertainties remain, particularly in terms of the pandemic.

“Vaccines offer some much-needed light at the end of the tunnel, but the ever-increasing number of Covid-19 cases, and sadly the human loss as well as renewed lockdowns, are a harsh reminder of how delicate the situation remains,” Barkindo lamented.