Qatar’s energy minister has defended OPEC’s oil market strategy, saying a deal between the oil producing group and non-OPEC producers is not aimed at manipulating oil prices.
“OPEC is not trying to manipulate the price, it’s trying to bring the market to balance,” Qatar’s Minister of Energy and Industry Mohammed Bin Saleh Al-Sada, told CNBC on Wednesday.
President Donald Trump has argued that OPEC and non-OPEC producers’ late-2016 deal to curb production, made in a bid to support prices and balance oil market supply and demand dynamics, is hurting consumers. He has called on OPEC’s de facto leader Saudi Arabia, and Russia, to raise output.
Al-Sada said low oil prices do not necessarily have a positive impact on global economic growth, however.
“When OPEC took the measure to restrict the production from its end, as well as some allied (oil producing) countries, it was meant to shave the extra excessive stock which was at a record high that was depressing the oil price. That depression of the oil price led to what? (Did it) lead to a better world economy?,” he told a panel moderated by CNBC’s Geoff Cutmore at the Russian Energy Week in Moscow.
“In fact, there was the worst record for the global economy during that downturn in the oil price,” he said.
“Now during the journey of the recovery in the oil price looks what happened – the balance (in the market) between supply and demand has taken place, the world economy is at its best now,” he added.
The deal between OPEC and non-OPEC producers including Russia has led oil prices to rise as the balance between global oil supply and demand has become more balanced. The deal (and more specifically, the price rise) has drawn criticism from Trump, however, who said OPEC and Russia were manipulating oil prices and markets. He has called on them to increase production and bring down oil prices.
Excessive stock and low oil prices would create difficulties for producers, Qatar’s energy minister said.
“What happens now after the recovery of the oil price is that the investment is not adequate to cater for the demand worldwide, Investment in oil and gas has not been commensurate with world demand down the road,” he said.