Oil-Related Developments - December 2017

At a ministerial conclave in Vienna on 30th November, OPEC and some non-OPEC oil ministers agreed to extend production cuts, totalling 1.8 mbd, through to the end of 2018, in a bid to tackle a global glut of crude oil and keep prices buoyant. Following the deal, which ministers hailed as historic and unprecedented, the price of Brent stood at $63.28 a barrel, up 0.27% on the day. WTI crude rose by 10 cents to $57.40.

The extension will be reviewed in June to assess whether the glut of oil on world markets is on track to come back down to a five-year average.

Alexander Novak, the Russian energy minister, said: “To reach our goals, to rebalance the market, we must continue to act in a coordinated fashion, to act jointly, which would take us further in 2018 [with cuts].”

Saudi oil minister Khalid al-Falih Falih said that OPEC was aware of the risk of a resurgent US shale oil industry, and the group would be “agile” in responding. However, he downplayed shale’s impact, saying US oil production this year had been moderate. The number of US oil rigs has leapt by more than a third since a year ago, when OPEC and Russia first agreed to curtail production.

Oil analysts Wood Mackenzie said stakes had been high for OPEC and Russia, but the production cut decision means global oil supply and demand will come closer into balance in the second half of 2018, and prices would go higher at the same time. 

 

December 1, 2017

E-mail me when people leave their comments –

You need to be a member of Ananta Centre to add comments!

Join Ananta Centre

About the Author

Ambassador Talmiz Ahmed

Former Ambassador of India to Saudia Arabia, Oman and UAE, monitors developments in the West Asian region.  

Ambassador Talmiz Ahmad joined the Indian Foreign Service in 1974. Early in his career, he was posted in a number of West Asian countries such as Kuwait, Iraq and Yemen and later, between 1987 and 1990, he was Consul General in Jeddah. He also held positions in the Indian missions in New York, London and Pretoria. He served as Indian Ambassador to Saudi Arabia (2000-03; 2010-11); Oman (2003-04), and the UAE (2007-10). He was also Additional Secretary for International Cooperation in the Ministry of Petroleum and Natural Gas in 2004-06. In July 2011, the Saudi Government conferred on him the King Abdul Aziz Medal First Class for his contribution to the promotion of Indo – Saudi relations. After retirement from the Foreign Service in 2011, he worked in the corporate sector in Dubai for three years. He is now a full-time academic and holds the Ram Sathe Chair for International Studies, Symbiosis International University. He has published three books: Reform in the Arab World: External Influences and Regional Debates (2005), Children of Abraham at War: the Clash of Messianic Militarisms (2010), and The Islamist Challenge in West Asia: Doctrinal and Political Competitions after the Arab Spring (2013). He writes and lectures frequently on Political Islam, the politics and economics of West Asia and the Indian Ocean and energy security issues.