Source: Organization of the Petroleum Exporting Countries – OPEC
Delivered by HE Manuel Salvador Quevedo Fernandez, Venezuela’s People’s Minister of Petroleum, and President of the OPEC Conference.
Your Excellencies, Distinguished Delegates, ladies and gentlemen,
In the name of the Bolivarian Republic of Venezuela and on behalf of the Heads of Delegation and the OPEC Secretariat, it is my pleasure to welcome you all to Vienna for the 176th Meeting of the OPEC Conference.
I would also like to take this opportunity to offer a very warm welcome to a number of Ministers who have assumed their position since the last OPEC Conference held on the 6th of December 2018.
HE Dr. Khaled Ali Al-Fadhel, Kuwait’s Minister of Oil, Minister of Electricity & Water, Chairman of the Board – Kuwait Petroleum Corporation (KPC), who is today represented by His Excellency Sadiq Marafi, State of Kuwait’s Ambassador to Austria; HE Mohamed Arkab, Algeria’s Minister of Energy; and HE Noël Mboumba, Gabon’s Minister of Oil, Gas and Hydrocarbons, who is today represented by Mr. Etienne Lepoukou, Gabon’s Governor for OPEC.
On behalf of OPEC, we wish each of you every success in your highly demanding positions and we all look forward to closely working with you.
We would also like to extend our sincere thanks for the highly beneficial efforts of your predecessors, who contributed greatly to our past successes.
HE Bakheet S. Al-Rashidi from Kuwait, who diligently and adeptly served on the Joint Ministerial Monitoring Committee in 2018; HE Mustapha Guitouni from Algeria, who also served attentively and knowledgeably on the JMMC. His Excellency Guitouni also graciously hosted us in Algiers for the 10th Meeting of the JMMC, on the second anniversary of the landmark ‘Algiers Accord’; and HE Pascal Houangni Ambouroue from Gabon, who has been an active and engaged member of the Ministerial Conference.
We wish them all every success in their future endeavours.
It also gives the Conference great pleasure to welcome Dr. Folasade Yemi-Esan, Head of Delegation for Nigeria and the Permanent Secretary of the Ministry of Petroleum Resources; Mr. Agustin Mba Okomo, Head of Delegation for Equatorial Guinea and Chairman of the OPEC Board of Governors; HE Dr Abdulhamid Alkhalifa, Director-General of OFID, as well as a number of observers from non-OPEC producing nations.
Excellencies, Ladies and Gentlemen,
Over the past 30 months or so we have had significant success in bringing down inventory levels, returning relative balance to the market, and helping evolve a more sustainability stability, in the interests of producers, consumers, and the global economy.
The importance of this cannot be overemphasized given the extreme severity of the downturn the industry faced in 2014-2016. The five-year average for OECD commercial stock levels reached a record high overhang of more than 400 million barrels in July 2016.
In May 2019, the overhang in OECD commercial oil stocks has been reduced to 25 million barrels.
It should be noted that OPEC, as well as participating non-OPEC producing countries in the ‘Declaration of Cooperation’, have at the same time been confronted by rising liquids supply from other non-OPEC producers, particularly in the US, as they have sought to bring the market into a more balanced state.
Nonetheless, the achievements of the ‘Declaration of Cooperation’ over the past two-and-a-half years to pursue a balanced, stable and sustainable global oil market are clear for all to see.
This can be viewed most recently in the record overall conformity levels to the voluntary production adjustments that were put in place last December.
In this regard, we should specifically commend the stellar efforts of the Kingdom of Saudi Arabia who have consistently led the way in terms of its voluntary production adjustment. This has been driven by HE Al-Falih, who has put his country ‘front and centre’ of the efforts to rebalance the market and return the sustainable stability we all desire.
On an individual level, it remains vital that each Member Country takes full responsibility for its own adjustments. That is the best way for us all to continue to achieve success.
This is also an appropriate occasion to again thank OPEC’s Economic Commission Board (ECB), the Joint Ministerial Monitoring Committee (JMMC), the Joint Technical Committee (JTC) and the OPEC Secretariat, who have all provided expert guidance and assistance in the effective and efficient implementation of the ‘Declaration’.
It is also important to reference the involuntary supply disruptions in a number of OPEC Member Countries, which have in fact impacted supply developments more than the voluntary productions adjustments in the ‘Declaration of Cooperation’.
It underscores the variety of components in the global supply pool that have been significant in keeping the overall global oil market balance in check.
From Venezuela, we raise our voice in order to avoid using the oil market as a tool to attack the economies of sovereign nations, which directly affects the welfare and development of the people. This is undoubtedly unjust, illegal and immoral, especially if the one who exercises it does so pursuing dominance.
Excellencies, ladies and gentlemen.
At today’s meeting, we will review the developments of the past six months, as well as the market outlook for the remainder of 2019 and beyond, as we consider how we proceed going forward.
Since our last meeting in December 2018, we saw an improvement in market conditions over the first part of the year, particularly when compared to the turbulence and volatility of the fourth quarter of 2018.
However, over the past month or so we have seen a growing list of escalating uncertainties, related to such issues as trade negotiations, monetary policy developments, as well as geopolitical issues.
There are clear signs of some economic bearishness, and many institutions are pointing to a more challenging outlook for oil supply and demand fundamentals.
In OPEC’s most recent Monthly Oil Market Report, we saw a further downward revision to 2019 world oil demand, which is now projected to rise by 1.14 million barrels a day (mb/d), and alongside this is an assessment for non-OPEC oil supply in 2019 to grow at a pace of 2.14 mb/d, year-on-year.
Moreover, we also need to keep a keen eye on inventory levels.
It underscores the fact we cannot rest on this success. We need to remain vigilant; continually monitor the market; and be flexible and agile to take the necessary actions – as we have done in the past – that are required to maintain these hard won successes.
OPEC recognizes that the challenge of balancing the oil market and maintaining stability is a continuous process, and a shared responsibility.
It was the legendary Venezuelan Francisco de Miranda who once said:
“The size of our success is linked to the size of our common efforts.”
Thank you for your attention.