Suhail bin Mohammed Faraj Faris Al Mazrouei, UAE Minister of Energy and Industry, has said that Opec and its members "don't control" oil prices and that the market "dictates" them.
"What Opec strives to achieve is a balanced oil market that is fair for both consumers and producers, and encourages the many trillions of dollars of investment that is needed to secure future production," he said.
In an opinion piece written to mark the end of his tenure as president of the Opec conference and to shed light on the organisation's achievements during 2018, the UAE Energy Minister highlighted that one of the most notable achievements of 2018 was undoubtedly the progress made in developing a charter between Opec and its non-Opec partners to continue collaborating in the years ahead.
He noted that this landmark pact was initialled in December at the 175th Opec conference, adding that this is an important step in a relationship that will continue to evolve and flourish in the future.
He also stated that the UAE has been a member of Opec for over 50 years, and that by working with like-minded partners, both within and outside of the Opec organisation, the goal of a more stable, less volatile oil market can be pursued.
Reflecting back to December 2016 when Opec and its partners signed the 'Declaration of cooperation' - a voluntary agreement to adjust production levels and thereby remove excess inventory overhang - Al Mazrouei said the organisation's goal was to deliver lasting and sustainable stability to the oil market in the interest of both producers and consumers.
In this regard, he added that "fast forward to mid-2018 and inventory overhang had been reduced. Opec and its partners were complying well above their committed targets and there was a sense of optimism in our industry again. This was evident at Opec's 7th international seminar, which was held in June in Vienna".
On December 1, 2017, and during Opec's 173rd meeting, Al Mazrouei was elected president of the Opec conference for one year, with effect from January 1, 2018.
"It was a particular privilege for me to hold this presidency during the Year of Zayed, a year in which we celebrate the memory of our founding father, the late Sheikh Zayed bin Sultan bin Zayed Al Nahyan, of blessed memory, a leader whose values embody and inspire our nation and its people."
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Al Mazrouei said engagement and dialogue are important priorities for Opec and, as president of the Opec conference, he was honoured to attend a wide range of events and meetings with a broad cross-section of stakeholders throughout the year.
"What struck me in all these engagements was the tireless commitment and positive intent of so many people. It's clear that oil and gas continues to play a critical role in driving economic growth and development, and it will do so for many years to come," he said.
"One question that I was frequently asked in 2018, is was what price does Opec, or the UAE, want for oil? What's the right price? What's a good price? And as my friends in the media will by now know, my answer is always the same. Opec and its members don't control the oil price," he added.
The minister said the market dictates the oil price. "What Opec strives to achieve is a balanced oil market that is fair for both consumers and producers, and encourages the many trillions of dollars of investment that is needed to secure future production," he said.
"This was a consistent theme in all of my addresses throughout the year. Every major forecast show that oil will remain a central component of the world's energy mix for the foreseeable future, and we must invest now so that we meet future demand needs."
Referring to Opec's World Oil Outlook 2018, the minister said oil-related investments across the upstream, midstream and downstream are estimated at around $11 trillion by 2040.
"We should not forget that more than a trillion dollars of capex cuts were made during the recent industry downturn. As we learnt from previous market cycles, such pronounced declines in investment are a serious threat to future supply. It's therefore important that we continue to invest, especially in larger long-cycle projects, to maintain ample supply and a capacity buffer, which can be used when needed to address short-term market needs," he said.
"As we look to the future, I will reiterate the comments of Barkindo who stressed that there are 'Three C's' that will be critical to future success: Collaboration. Collaboration. Collaboration," Al Mazrouei said.
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