Today marks the 60th anniversary of the foundation of the Organisation of the Petroleum Exporting Countries (OPEC). Six decades ago, Juan Pablo Pérez Alfonzo of Venezuela; Abdullah al-Tariki of Saudi Arabia; Dr Tala’at al-Shaibani of Iraq; Dr Fuad Rouhani of Iran; and Ahmed Sayed Omar of Kuwait met in Al-Shaab Hall in Baghdad on 10-14 September 1960 to build the basis for an organisation that represents the aspirations of petroleum-producing countries.
Since then, OPEC has worked tirelessly to coordinate and unify the petroleum and economic policies of its member countries, ensuring the stability of global oil markets, and a regular, sustainable and efficient supply of petroleum to consumers. This mission was not simply limited to establishing a steady income to members of OPEC but expanded to benefit all oil-producing nations of the world while safeguarding a fair return on investment for the industry as a whole. OPEC’s impact and role have recently been demonstrated and proved by the successful implementation and impact of the Declaration of Cooperation.
Iraq Energy Institute (IEI) congratulates OPEC’s Secretariat General and member states on this special day. It brings us, as Iraqis, both pride and joy to have our country at the centre of OPEC’s history and present. We wish the OPEC family ever more success as we, together, steer our countries through these challenging and pivotal times.
We are delighted to publish this Op-Ed by His Excellency Dr Mohammad Sanusi Barkindo, OPEC’s Secretary General, on this auspicious day.
Commitment & Cooperation
Op-Ed by H.E. Dr Mohammad Sanusi Barkindo, OPEC Secretary General
Back in March and April, the world faced its largest oil demand shock in living memory. On days in April, demand was 23 million barrels a day (mb/d) below that of 2019, the WTI May futures price contract went negative on April 20 and the global economy seemed to be teetering on abyss. Every producer was impacted, no one was immune.
The Organization of the Petroleum Exporting Countries (OPEC), and non-OPEC producers in the Declaration of Cooperation (DoC), acted decisively and swiftly to help cushion the tremors and help bring a semblance of stability to the market, with the largest and longest voluntary production adjustments in the history of the oil industry, which were supported far and wide, included positive comments from the White House.
The decision taken benefitted all producers, including the major international oil companies, and those independent operators in the Permian, Bakken and Eagle Ford. It has also received support from major consumers, such as India, and its platform for recovery and future growth is beneficial to securing the investments required to meet the future needs of consumers.
We are seeing some green shoots of recovery in the oil market on the back of voluntary production adjustments, the reopening of economies, and increased travel. However, with the global economy still on an unsure footing, and the oil market not expected to see oil demand return to 2019 levels before 2022, the DoC stands record to take any necessary actions to help ensure a balanced and stable oil market.
The foundations for the firm actions of OPEC and the DoC in 2020 can be traced back 60 years ago, when OPEC was founded in Baghdad on the 14 September 1960.
Six decades alone is a monumental achievement for a developing country organization, and one representing an especially volatile commodity – oil. Since the early 1970s we have witnessed seven major market cycles, including the latest in 2020, each of which has entangled with severe and sudden imbalances threaten the oil market and global economic development.
Throughout the Organization’s history there have been one recurring theme that has transcended across the decades and guided the Organization’s work to support sustainable oil market stability: cooperation.
The DoC has been a platform that has built on OPEC’s previous cooperative efforts and has also instilled a complementary framework for the future through the endorsement in 2019 of the Charter of Cooperation (CoC). The forward looking trajectory that underpins the CoC means that it is an important platform for participating countries, not only in helping maintain a sustainable oil market stability, but also in evolving a future for oil and all energies in the energy transition.
OPEC calls on all stakeholders to work together, find lasting solutions and take appropriate actions to help sustain balance and stability in the oil market, ensure future energy demand is met, and meet the challenge of climate change.
The energy challenges of our planet requires comprehensive and flexible approaches – no single energy source is a panacea – and we should look to further advance cleaner and more efficient technologies across all available energies. We need to appreciate the nuances in the debate, and balance the needs of people in relation to their social welfare, specifically energy poverty, the economy and the environment.
In looking ahead, OPEC reaffirms its faith in the value of broader and deeper dialogue and cooperation. We are open to engage with all stakeholders. We need to talk to each other and not at each other. We need to strive together to ensure sustainable growth, development and prosperity not only for our generation, but for our children and for our children’s children.