With oil prices finally seeing an upturn, Qatar’s energy minister has called for international cooperation to rebalance the market.
Yesterday, Dr. Mohammad bin Saleh Al Sada, Minister of Energy & Industry, led a delegation from Qatar at the 35th meeting of the Petroleum Cooperation Committee.
The Riyadh meet included the ministers of oil and energy from five GCC states and Russia.
“The difficult phase is over… although the market is heading to being balanced, it needs our joint effort,” Al Sada reportedly said, suggesting support for oil production cuts.
He added that over the past two years, falling oil prices have caused investment liquidity to dry up.
As a result, there is a pressing need to attract significant investments on oil-related projects, QNA said.
Al Sada’s call was echoed by Khalid Al-Falih, Saudi minister of energy, industry and mineral resources.
“We are optimistic that oil prices will continue to improve in the future,” Kuwait’s state news wire KUNA reported Al-Falih as saying.
Earlier this year, Al Sada said oil prices needed to be around $65/barrel to give governments the chance to invest more in securing the world’s energy supply and “avoid any price shock.”
Brent Crude is currently trading at around $52 a barrel, which is an improvement from previous months.
But the sustained low prices have hit the economies of some producing countries such as Venezuela particularly hard.
This week, President Nicolas Maduro is in Qatar as part of a regional tour to urge production cuts, thus boosting the oil price.
Qatar bailed out the South American country last year with a loan of billions of dollars in cash.
For nearly two years, Maduro has been lobbying OPEC to reduce production, and a pre-agreement was finally reached last month.
Under the proposed terms, production would be cut to between 32.50 million and 33.0 million barrels per day (bpd), down from 33.39 million bpd in September.
Russia and representatives from OPEC countries will meet in Vienna today to get more countries to sign the deal.
OPEC plans to make the agreement official at its meeting at the end of next month, though Iraq appears to still be refusing to sign.
A report issued last week by the US-based Institute of International Finance (IIF) put Qatar’s breakeven oil price at $60 a barrel for 2016 and $63 for 2017.
This is around 13 percent lower than the GCC average of $69/barrel this year, Gulf Times reported.
This price includes the costs for production, exploring, well development, transportation and selling.
Countries with high breakeven prices are the worst hit when global oil prices fall.