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Foreword

3

Mohammad Sanusi Barkindo

Secretary General

deliberations, in a joint ‘Declaration of Cooperation’,

all parties committed to work towards market stability

in the interest of producers, consumers, the industry

and the global economy. This Declaration set out the

collective decision to voluntarily adjust production in

various ways, with the overall aim of having non-OPEC

producers reduce their own global production by near-

ly 600,000 b/d for six months, also effective 1 January

2017. The parties agreed that this could be extended

for another six months depending on subsequent mar-

ket conditions.

The historic Declaration of Cooperation repre-

sented the first such OPEC/non-OPEC cooperation in 15

years — and the markets recognized this immediately.

As soon as it was announced, the Declaration quickly

resulted in a return of investor confidence in the market.

In late December 2016, the OPEC Reference Basket im-

proved by nearly 20% over the previous monthly aver-

age to reach $51.67 per barrel. This was, in fact, the first

time the Basket had ended above $50/b in 18 months.

Other indicators at the end of the year similarly in-

dicated a broad improvement in the outlook for the oil

market with signs of realigning. The OECD stock over-

hang, for example, had diminished. At the time of this

writing, it was at 282 mb above the five-year average,

compared to 380 mb at the end of July 2016.

It’s worth highlighting that another positive out-

come of the meeting that produced the Deceleration

was the agreement to reinforce the collective decision

by creating a Joint Ministerial Monitoring Committee,

which would be tasked with monitoring progress to-

wards full implementation of the decisions, as well as

providing the necessary technical input with which to

regularly review the status of cooperation.

It would not be unseemly to emphasize the global

importance — and the impact — of the various historic

decisions reached in 2016. They successfully respond-

ed to prevailing market realities, while also taking into

consideration various short-term requirements. They

addressed the medium-, as well as long-term dimen-

sions of the challenges facing the markets, and helped

to put the oil market on the road to sustainable stabil-

ity by committing producers to the removal of nearly

1.8 mb/d of oil from an oversupplied market. Most

importantly, they demonstrated the commitment of

global oil producers around the world to make serious

efforts to help restore and sustain market stability.

When I assumed the position of Secretary General

of OPEC on 1 August 2016, I inherited various respon-

sibilities from my predecessor, HE Abdalla Salem El-

Badri. Part of this inheritance also involved ensuring

that the actions and decisions of OPEC continue to be

made for the well-being of the market, the industry and

the global economy as a whole. This has been demon-

strated again and again.

While it would be inaccurate to say that there were

any idle moments during 2016, there is now some re-

lief and a great deal of satisfaction arising from the fact

that our efforts then were not in vain — and that our

work now continues to serve an important function

in global economic affairs. OPEC’s numerous accom-

plishments last year continue to provide a degree of

encouragement to everyone involved — whether pro-

ducers or consumers.

As we look ahead to 2017, we continue to hope

that what was achieved last year will bear plenty of fruit

in 2017 — and beyond. As always, OPEC continues to

stand ever ready, monitoring economic and market in-

dicators, and when necessary, taking steps to ensure

that what happens in the oil market remains always in

the best interests of producers, consumers, the indus-

try and the global economy alike.