High-level remarks by OPEC Secretary General

Delivered by HE Mohammad Sanusi Barkindo, OPEC Secretary General, at the Energy Security and Markets Stability session at the G20 Energy Ministerial Meeting, 27 September 2020, via videoconference.

[Slide 1]

Excellencies,

I would like to commend the Kingdom of Saudi Arabia for the leadership shown during this year’s very challenging G20 Presidency. My thanks to HRH Prince Abdul Aziz Bin Salman, Minister of Energy, for convening this meeting and providing OPEC the opportunity to present its views on the energy market.

It is a distinct privilege to address you again, after last having spoken before you at the Extraordinary G20 Energy Ministers Meeting in April

[Slide 3]

That meeting took place during ‘Black April,’ when global oil demand plunged by around 23 mb/d in April 2020, and there was a real risk that oversupply would have added a further 1.3 billion barrels to global oil stocks, nearly exhausting the available worldwide storage capacity. This sent crude oil futures prices into negative territory for the first time in history, down to -$38/b on 20 April 2020.

In the face of this common challenge, the leaders of the world’s top oil-producing nations, along with Energy Ministers of the G20 countries, called for an unprecedented level of cooperation.  There was overwhelming consensus among major stakeholders that coordinated and decisive action was needed.

By working together, we have made great strides in restoring market balance, through a range of efforts carried out in accordance to each country’s national circumstances. These have including market-led measures and voluntary production adjustments on the supply side; offering storage space in SPR facilities; and stimulus programmes in G20 economies, totaling more than $20 trillion.

The ‘Declaration of Cooperation’ (DoC) partners have provided a 2-year road map for their action to restore market balance, which began with a 9.7 mb/d reduction starting 1 May 2020, and continuing their production adjustments over the entire period up to April 2022.

[Slide 4]

Continued efforts and vigilance will be needed on all our parts. Amid ongoing uncertainties, partners in the DoC have stepped up our efforts to ensure fully and timely conformity, both collectively and individually.  At the most recent meeting of the Joint Ministerial Monitoring Committee (JMMC) on 19 September, Ministers welcomed overall conformity of 102%, reiterated the importance of compensating overproduced volumes as soon as possible.

The latest forecast expects world oil demand in 2020 to contract by 9.5 mb/d, while non-OPEC liquids production is estimated to decline by 2.7 mb/d.

[Slide 5]

The expected supply/demand balance would result in OECD commercial stocks standing well above the latest five-year average in 3Q20. However, stocks would then fall in 4Q20, to stand around 123 mb above the latest five-year average.

For 2021, OECD commercial stocks are expected to stand slightly above the latest five-year average in 1Q21, then to fall below the latest five-year average over the remainder of 2021.

Therefore, our job is not yet complete. We must reach across whatever divide we face and work towards broader and consensus-driven solutions that are beneficial to our stakeholders and ultimately the entire world. It is in this spirit that I look forward to today’s deliberations.

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HE Mohammad Sanusi Barkindo, OPEC Secretary General

HE Mohammad Sanusi Barkindo, OPEC Secretary General