MUSCAT, JULY 7 - Current international oil price trends, averaging in the $60-plus per barrel range, are “healthy enough” for the global energy industry to start reinvesting in hydrocarbons, according to Oman’s Minister of Oil and Gas.
Dr Mohammed bin Hamad al Rumhy (pictured) made the observation in an interview to Bloomberg TV soon after last week landmark decision by Opec and non-Opec members (together known as Opec-Plus) to rollover production cuts by a further nine months.
“Oil prices are healthy enough for the market to start thinking about investment and going back to their drawing boards. I think the industry in general feels that it is breathing (easier), all the numbers in the industry are looking good,” Dr Al Rumhy remarked.
Oman, while not a member of Opec, is part of a grouping of 10 non-Opec oil producers — together known as Opec-Plus — that have formed an alliance to help prop up international oil prices in the wake of the global oil price slump of 2014. The Sultanate is also among a number of countries that have been urging oil markets to take heart from rebounding oil prices and resume investments in the energy sector.
In the interview with Bloomberg’s Manus Cranny, Dr Al Rumhy welcomed the Opec-Plus grouping’s unanimous decision to extend the oil production cuts — a measure that has been in force since the end of 2016.
“We came here to send a message to the market that we are serious in creating this balanced situation and sustainable policies for stability in the market,” said the Minister of Oil and Gas. “Hopefully, this decision will erode some of the volatility (in the market) and send a message of clarity, while removing the kind of confusion and uncertainty (that would have prevailed otherwise). But time will tell if we have achieved that goal.”
The consistently high levels of compliance by producers with their allocated production cuts was also a highlight of the Vienna meeting, he said. “Compliance is the objective of the discussion we have been having, and the whole Opec-Plus (alliance) is about keeping promises, which is compliance at the end of the day.”
Asked for his thoughts on the potential for a sustained price rally in the wake of the extension, Dr Al Rumhy stated: “We have no desire or interest to start talking about prices. We were looking at stability in the market, and the agreement we came up today indicates that there is good probability we will have a stable second half in the market for the products we aspire to sell to the rest of the world.”
Dr Al Rumhy also rejected any suggestion that the partnership between Opec and non-Opec producers (including Russia) had failed to deliver its stated goal of rebalancing global oil markets. The agreement by Opec-Plus has been in play for the past three years, during which it has been delivering on its objectives, he asserted. “I think it has delivered the objectives of many of us and the current price range of $60-plus (per barrel) is what we been wishing,” he added.