OPEC loses $1trn to oil price plunge in two years, says Sec Gen

Organization of the Petroleum Exporting Countries (OPEC), Secretary-General, Dr Mohammad Barkindo revealed that OPEC member countries have lost around $1 trillion due to falling oil prices in 2015 and 2016.

Barkindo revealed this in his opening speech at Nigeria‘s Fourth International Petroleum Summit in Abuja on Monday under the theme: “From Crisis to Opportunity, New Concepts”.

“In terms of the shortfall for OPEC member countries during this oil cycle, around $1 trillion has been lost collectively due to falling prices in 2015 and 2016.

“No OPEC member country has been immune from the contraction in oil revenues during this cycle.

“This has had a serious impact on the resources available to the government to pursue its laudable development programs,” he said.

Likewise, he noted that while the 2020-21 recession was also caused by external factors far beyond Nigeria’s borders, the devastating COVID-19 pandemic has also severely affected global demand for oil and, again, times, exposing developing economies.

Commenting further on the impact of COVID -19, he said that no nation or sector of the global economy was spared and that at the end of March 2020 the world appeared to be a different planet from what ‘it was at the start of this month.

“The toughest time of this toughest year has been April 2020.

Barkindo noted that the global economy contracted 3.5% year-on-year in 2020, global oil demand fell 9.5 mb / d, falling another 22 mb / d in April. 2020.

“Within OPEC, we have been stunned by events that we never imagined possible. On April 20, 2020, WTI turned negative for the first time in history, with prices plummeting to -37 dollars a barrel. The sellers paid the buyers to transport their crude.

Faced with this unprecedented situation, OPEC knew it had to act. Fortunately, we didn’t have to reinvent the wheel.

“We turned to the mechanism that helped us get out of the 2015-2016 oil crisis: the ‘Declaration of Cooperation (DoC)It was an effort to move from crisis to opportunity, ”he added.

He praised the commitment and leadership of President Muhammadu Buhari to ensure the effectiveness of the system.

“President Buhari and his government courageously took up these two great challenges. Deploy exemplary managerial skills, keen sense and extraordinary prudence by diverting resources to the most productive sectors of our economy.

“The government has been able to revive growth. Nigeria quickly emerged from the recession and returned to the path of growth.

“The government organized virus containment measures, public awareness campaigns on the devastating effects of the pandemic and quickly provided much needed economic stimulus.

“This proactive response protected the economy from a more severe contraction. The government should be applauded for its swift and vigorous actions, ”OPEC Secretary-General said.

He noted that when Buhari took office, he vowed to perform his duties in the interest of Nigeria’s “sovereignty, integrity and solidarity”.

“I congratulate the president on having been faithful to his oath of office, especially in the face of the flagrant threats to our security,” he added.

Barkindo condemned the violent attacks on men and women in uniform and called on all compatriots to join hands in supporting the government at all levels in promoting the cause of unity, peace and stability of our great country, Nigeria.

At the same time, he announced that OPEC had revised its global economic forecast to 5.5% for 2021, but with an oil demand growth forecast remaining at 6 Mb/d.

“It should be borne in mind that the majority of this demand is carried over to the second half of 2021. A backward action structure remains in all major crude oil benchmarks.

In addition, we saw a $ 6.9 million month-on-month pullback in OECD oil trade inventories in April. That’s 160MB less than the same period a year ago and 34MB more than the 2015-2019 average.

We expect to see more raffles in the coming months, ”he added. (NAN)