Muhammad Suleiman Al-Ankari
The Organization of the Petroleum Exporting Countries has always proven to be the safety valve for energy supply globally, and with its alliance, which expanded to include non-member producing countries, has been instrumental in maintaining a balanced oil market. There is an increased level of coordination and integration that attracts investment so that supply keeps pace with the growth of demand. If we look at the last fifteen years, we find that the oil market witnessed sharp price volatility, starting with the global financial crisis in 2008 and ending with the current crisis due to the Corona pandemic. , but OPEC, led by the Kingdom of Saudi Arabia, has always aimed to support the oil industry to balance the market and protect the global economy from weak production capacity growth, which could have negative consequences for the sustainability of economic growth. .
Perhaps to continue increasing production, according to the approved plan issued by the monthly meeting of “OPEC+” last Thursday, to 400,000 barrels per month, despite the emergence of a new mutation with the corona virus, which has caused a global The breakdown and some measures reduced demand for jet fuel in Europe and Africa, with some consuming countries determined to pump volumes of their reserves to calm oil prices, but “OPEC+ A different view of what was expected from oil market speculators was the tendency to revise the group’s monthly oil production growth plans, but to their surprise there has been no change. , especially with regard to the development of new mutants or effects of micron. The approach of producing countries in the alliance is long-term and considers the market strategically in terms of a balance between supply and demand, and not a target price. If they decide to stop or reduce growth without completing, information about the effects of this mutation will be looked into for their decisions that they aim to raise prices, and this is what the producing countries do not want. Because prices are determined by the market. Finally B through the balance of supply and demand and the state of the global economy and some other effects such as the weakness and strength of the dollar, although the greater impact ratio will always be in favor of both sides of the market, supply and demand.
The decision was wise and balanced and expressed the goal of this alliance, considering the importance of sustaining the growth of investment in the oil sector to meet the growth of global demand now and in the future, especially when prices rise sharply. The ups and downs do not encourage oil producers to make new investments because the financiers of banks and others cannot be sure of the future. They will not venture into financing these companies for fear of default or delay in payments, Which is currently evident in countries that have many companies operating in the field of shale oil production, while “OPEC+” countries as a whole have permanent plans to increase investment and production because it is a core industry for them and essential in the development of their economies. It is understandable that the “OPEC+” alliance, continuing its plan without any modifications, sends a message to the world and consumers at large that you are a partner with us in the renaissance and sustainability of this vital industry for the global economy and provide the necessary supplies. The goal is to enhance the concept of this economic partnership between producers and consumers.
The belief of the “OPEC+” countries, led by Saudi Arabia, that the demand for oil will remain good in the future, and that the industry always needs to pump investments to achieve the necessary balance in the market. What is needed for that, along with any stability of price movement, is starting to reflect on oil markets, even if it is too early to judge them, given that the world is still awaiting the final results of studies on the effects of Omicron mutants. is doing, and whether it will need to be confronted with any additional measures, although it is unlikely that there will be a widespread shutdown, but be prepared for all possibilities it is the solution to face the worst.
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