OPEC Head Urges All Producers to Join Production Cuts

OPEC Head Urges All Producers to Join Production Cuts

OPEC’s Secretary General Mohammed Barkindo urged US shale oil companies to help curb global oil supply warning that the market might need to be rebalanced next year in the medium to long term, using extraordinary measures. “We urge our friends, in the shale basins of North America to take this shared responsibility with all seriousness it deserves, as one of the key lessons learnt from the current unique supply-driven cycle,” Mr. Barkindo said while speaking at a conference in New Delhi.

While the cartel and some other producers have frozen their output this year, majority of non-OPEC producers have not conformed to the cut. US output went up by 10% this year, driven largely by shale drillers. Mr. Bankindo commented that he hoped that all new producers would join output cuts, not just shale drillers.

Saudi Arabia curbed crude oil allocations for next month by 560,000 barrels per day (bpd) in support of its commitment to the OPEC-led supply reduction deal. The kingdom plans to ship a bit more than 7 million bpd in November, an increase from low levels during the summer when domestic demand was at its highest.

Mr. Barkindo said that looking ahead to 2040, oil and other fossil fuels would account for 70% of the world’s energy blend. This forecast, however, goes against the views of most analysts who see that share below 70% by 2040 due to a significant progress in renewable energy sources and an increasing use of electric vehicles.