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Despite fall in prices OPEC not ready to cut production

July 31, 2015 at 11:29 am

OPEC is “not ready” to cut production despite the recent fall in crude prices and the possible “strong” return of Iranian oil onto the market, the organisation’s Secretary-General Abdullah El-Badri said yesterday.

After a meeting with Russian Energy Minister Alexander Novak, El-Badri said: “We are not ready to reduce our production.” After the meeting, OPEC and Russia both stated that they are expecting “a more balanced situation in the oil market and its stabilisation in 2016.”

El-Badri added: “The current situation is a test for all the producers and investors. The prices will undoubtedly stabilise, but it is too early to tell when.”

“There are possible signs of achieving a more balanced situation in the oil market and to stabilise it by 2016, which is a mandatory requirement for the continuity of timely and sufficient investments.”

The Russian energy minister told the OPEC secretary-general that Russia and the organisation are working towards the same goal; maintaining a balanced and stable oil market.

In June, OPEC decided to keep its production at 30 million barrels a day. This quota has been the same for the past three and a half years. It justified its choice on the grounds that it is an attempt to retain its share of the global market despite the obvious fall in oil prices. This has led to the decline in the member states’ revenues.