Brief high-level remarks by OPEC Secretary General

Delivered by HE Mohammad Sanusi Barkindo, OPEC Secretary General, at the Extraordinary G20 Energy Ministers Meeting, 10 April 2020, via webinar.

Excellencies,

I would like to begin by thanking the Kingdom of Saudi Arabia, led wisely, astutely and courageously by the Custodian of the Two Holy Mosques, King Salman bin Abdulaziz Al-Saud; Crown Prince Mohammed bin Salman bin Abdulaziz Al Saud; and my friend HRH Prince Abdul Aziz Bin Salman, the Minister of Energy, for convening this Extraordinary G20 Energy Ministers Meeting today.

This meeting is timely, being held back-to-back with our OPEC+ meeting yesterday.

We are living in unprecedented times. When the year 2020 began no-one could have dreamt up the situation we find ourselves in today.

The COVID-19 pandemic has pervaded almost every aspect of our daily lives. It is a major disruptor in terms of the tragic loss of life; it has forced governments into widespread lockdowns; economies are in distress; schools have closed; and we are holding meetings like this one via teleconference.

Every economic sector has been impacted by this silent beast.  This is clearly evident in global oil. Every producer, many of whom are developing nations, has been impacted; no-one is immune.

It is forcing us to assess and reassess what the consequences are on an almost daily basis. We need to find solutions to help all peoples of the world, the industry and related businesses, as we try and navigate these extraordinary times.

This was evident in the responsive and responsible decision taken yesterday by OPEC and participating countries in the ‘Declaration of Cooperation’ to adjust crude oil production by 10 mb/d beginning on 1 May 2020, for an initial period of two months; then by 8 mb/d from July to December 2020; and by 6 mb/d for the period of January 2021 to April 2022, in the interests of producers, consumers, and the global economy.

May I, on behalf of the Conference, congratulate the Chairman, HRH Prince Abdul Aziz Bin Salman, for the astute leadership he displayed in managing the (Extraordinary) OPEC and non-OPEC Ministerial Meeting yesterday (9 April).

Together with his co-chair, HE Alexander Novak of the Russian Federation, they successfully managed one of the longest and probably the most historic conferences in the history of OPEC.

The success of this historic agreement depends on the full and timely participation of all producers. Everyone has a responsibility to play their part.  The sustained stability of the global oil market is a shared responsibility.

We, therefore, need to broaden this cooperation and welcome the support of others. Complex challenges, need comprehensive and ‘global’ solutions, under your able leadership Mr Chairman.

This is starkly apparent when we look at the harrowing global recession now upon us, and the oil demand destruction we are facing.

[Slide 3]

We see global GDP growth in 2020 at a negative 1.1%, a greater contraction than that for the Great Recession of 2008-2009, and global oil demand growth is forecast to drop by 6.8 mb/d, with the second quarter alone around 12 mb/d, and expanding. 

[Slide 4]

These are jaw-dropping numbers!

The jaw drops even further when we look at the supply and demand imbalance in the 2Q20, if no action is taken. 

[Slide 5]

There could be a colossal excess volume of 14.7 mb/d, which would add a further 1.3 billion barrels to global crude oil stocks.  This figures suggests that the available global crude oil storage capacity would be exhausted before the end of May.

There is a ghostly spectre encircling the oil industry; it needs to be addressed urgently.  We need to act now, so we can come out of other side of this pandemic with the strength of our industry intact. An industry that has fueled the current civilization.

We welcome the importance that the G20 attaches to oil market stability.  We also appreciate that many G20 Members are large consumers of oil.  

In this regard, we need to appreciate that any shortfall in investments in the coming year could sow the seeds for future energy security issues in the years ahead.  It is in all of our interests to support stability in this vital global industry.

I commend my colleague, Fatih Birol, in his role as Executive Director of the IEA, for his tireless work over the past few weeks in dialoguing with both producers and consumers.

As I mentioned in my remarks yesterday to the 9th (Extraordinary) OPEC and non-OPEC Ministerial Meeting: we need to dare to believe and cooperate with each other

There is a huge historic challenge before us, but I firmly believe that is not insurmountable if we work together in solidarity and courage for the common cause of market stability.

It was Eleanor Roosevelt that once said:

“Courage is more exhilarating than fear, and in the long run it is easier. We do not have to become heroes overnight. Just a step at a time, meeting each thing that comes up, seeing it is not as dreadful as it appeared, discovering we have the strength to stare it down.”

As an industry, we can stare down the situation we face through the enduring timelessness of the principles and key tenets of international cooperation.

These can help guide us through these dark days.

Thank you.

HE Mohammad Sanusi Barkindo, OPEC Secretary General

HE Mohammad Sanusi Barkindo, OPEC Secretary General

OPEC Secretary General delivers his remarks

OPEC Secretary General delivers his remarks

The Extraordinary G20 Energy Ministers Meeting was held via webinar

The Extraordinary G20 Energy Ministers Meeting was held via webinar