By Obas Esiedesa
The Secretary General of Organisation of Petroleum Exporting Countries (OPEC), Dr. Muhammad Barkindo as expressed optimism that 2021 will be a good year for oil producers, even as Brent crude oil traded at $56.07.
Barkindo who spoke on Tuesday at 6th Iranian Petroleum and Energy Club Congress and Exhibition Videoconference, said the international oil market situation would have been worse but for the intervention of OPEC and its allies.
He stated: “All OPEC and non-OPEC participants can be proud of what we have done – together – in the face of an unparalleled crisis. World leaders and energy stakeholders everywhere have commended our commitments and achievements. They continue to look to us in the face of calamity.
“Without our base in place, the situation would certainly have been far worse. We continue in our labours, adjusting our decisions month-by-month to ensure energy security during the fragile period still facing the market in the coming months as the world fiercely battles to wrestle this mortal enemy – COVID-19 – to the ground.
“A bright spot has come with the start of immunizations, but rapidly increasing infection rates and faster-spreading strains of the virus are likely to drag on the strong recovery this year. Nonetheless, we do believe that the worst is over!”.
Barkindo, a former Group Managing Director of the Nigerian National Petroleum Corporation, NNPC, explained that OPEC and its allies took the Covid-19 impact into consideration when projections and planning were made for 2021.
According to him, “Our predicted oil demand for 2021 stayed unchanged from the previous month in our January Monthly Oil Market Report, rising by 5.9 mb/d to average 95.9 mb/d. Meanwhile, growth was revised slightly higher for 2020 to a decline of 9.8 mb/d to average 90 mb/d — an unprecedented overall decline of about 10 per cent. OECD Americas displayed poorer performance than expected over 2020, especially the US, while China and India saw better-than-expected figures due to stronger gasoline and petrochemical feedstock requirements.
“With the market currently switching into backwardation, we are hopeful that 2021 will be a good year. In fact, we see the global economy growing by about 4.4 per cent, which is a big leap from the minus 4.1 per cent witnessed in 2020, which will have a positive knock-on effect on oil consumption.
“It is equally important to examine the long-term, post-COVID outlook for the industry, thus I will presently turn to this topic. Indeed, despite what some naysayers put forth, we see a bright future for our industry.
“In our most recent World Oil Outlook for 2020, launched in October of last year, we incorporated the effects of the pandemic as much as possible. As stated in the WOO, “The pandemic’s impact and resulting containment efforts precipitated one of the most tumultuous periods in the history of oil.”
He noted that “despite the large drop in 2020 and the resulting scramble by the industry to cope with massive losses of up to 30 per cent of oil demand in April — the sharpest downturn in living memory — we are optimistic about the future. In fact, global primary energy demand is forecast to continue growing in the medium and long term, rising by a substantial 25 per cent in the period to 2045”.