It’s good to talk (and listen) …

OPEC Bulletin Commentary – November 2020

As an intergovernmental organization and proud member of the multilateral system, dialogue is integral to OPEC and part of its raison d’être. This has been evident since the fledging Organization found its wings on the banks of the River Tigris in Baghdad back in September 1960.

OPEC’s first resolution, adopted at the inaugural Meeting of the OPEC Conference on September 14, 1 960, put dialogue front-and-centre of the new Organization’s modus operandi. This was reflective of the Organization’s collective approach to tackling the prevailing industry challenges at that time and was the first expression of the Organization’s commitment to dialogue and cooperation.

Perhaps of all the themes that have resonated throughout OPEC’s history, this has been the most consistent. The Organization realized it could not operate in a vacuum and there was a need to explore and evolve dialogues with other producers, consumers and other international organizations.

This has advanced over the six decades of OPEC’s existence and has intensified significantly in recent years. The fruits of this were on display over the past month, with a plethora of high-level dialogues with a variety of parties.

On October 22 there was the 7th Joint IEA-IEF-OPEC Workshop on the Interactions between Physical and Financial Energy Markets, which is just one part of the trilateral work programme established by the three organizations and endorsed by energy ministers at the 12th International Energy Forum in Cancún, Mexico, in March 2010.

The Workshop saw over 120 participants cover a variety of issues, focused mainly on the COVID-19 pandemic and its impact on the global economy, commodity markets, industry investment patterns, the energy transition and oil market volatility.

Just five days later, OPEC hosted the 14th High-Level Meeting of the EU-OPEC Energy Dialogue, a continuation of the well-established dialogue that began in 2005.

The frank and open exchanges focused on the ongoing impacts of the pandemic on energy markets, and looking longer-term, on the challenges of climate change and the energy transition, as well as the need for adequate and timely investments to ensure a lasting and sustainable recovery.

On November 3, the 7th High-level Meeting of the OPEC-Russia Energy Dialogue took place, with both parties emphasizing the strategic importance of the relationship between OPEC and the Russian Federation, not only at the bilateral level, but also through the ‘Declaration of Cooperation’ (DoC) and the ‘Charter of Cooperation’ (CoC).

Looking ahead, it was recognized that market challenges and uncertainties remain, with both parties stating that they remained steadfast in their commitment to help rebalance the market and achieve a long-term sustainable stability.

The very next day saw OPEC and the Gas Exporting Countries Forum (GECF) hold their first high-level meeting, highlighting the growing cooperation between the two organizations.

It proved to be an opportunity for the organizations to discuss collaborative research activities as part of the multilateral cooperation, especially as the oil and gas industries continue to face major challenges related to the COVID-19 pandemic, and given that both oil and gas are essential to the energy transition, and in helping achieve a low-carbon energy system.

This was followed on November 5 by the 4th High-Level Meeting of the OPEC-India Dialogue, which also discussed the repercussions of the pandemic, longer-term prospects, and the fact that India’s support for the producer-consumer dialogue has greatly contributed to the Organization’s success in pursuing oil market sustainability in recent years.

India was also invited to join the CoC as a producer and major oil consumer, to benefit from exchanges and dialogue on relevant issues affecting the oil market.

What all these meetings also emphasized was the importance of the DoC in 2020, with participants embarking on the largest production adjustments, and for the longest period, in the history of the oil industry to help counter the unprecedented shock to oil markets. It was noted that the decisions taken have benefitted both producers and consumers.

The recent dialogues also underscore OPEC’s commitment to making sure all industry stakeholders are listened to, and kept abreast of OPEC and DoC developments, particularly now in the lead up to the 180th Meeting of the OPEC Conference on November 30 and the 12th OPEC and non-OPEC Ministerial Meeting on December 1.

More dialogues are also set to take place following the Ministerial Meetings, with the 6th Technical Meeting on Asian Energy and Oil Outlook and 4th High-level Meeting of the OPEC-China Energy Dialogue scheduled for early December.

It was Winston Churchill that once said: “Courage is what it takes to stand up and speak; courage is also what it takes to sit down and listen.”

Looking back on OPEC’s history, the Organization has always been open to both.

Looking forward, we believe the importance of dialogue and the multilateral system will only intensify in the coming decades and OPEC will look to extend its role at the very heart of it.

OPEC Bulletin November 2020

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