During the “Gulf Intelligence Global UAE Energy Forum 2021” on Wednesday, 13th January 2021, the Secretary-General of the Organisation of Petroleum Exporting Countries (OPEC), His Excellency Mohammed Barkindo, addressed the possible return of Iranian oil exports and the preparation of OPEC.
He said the anticipated return should not be a concern for energy markets. Tehran’s oil exports were reduced to zero due to sanctions imposed on the country by the United States, but the coming of a new administration may ease the sanction, allowing Iranian oil to return to the global market.
“We have established a record of continuously adapting, being flexible and addressing issues as they emerge,” he said.
The above statement refers to the decision by OPEC+ to increase production in the second half of 2018, after the United States’s row with Iran.
“I cannot pre-empt what will happen. We are also following very closely these developments. But be rest assured that there is no need for the market to [have any] heightened concern at the moment.”
The OPEC+ coalition has been undertaking market correction since 2016. Since the breakout of the COVID-19 pandemic, it has also been playing a lead role in stabilising oil markets. Oil prices have gone up by 10% since the start of the year due to efforts by the coalition, the distribution of COVID-19 vaccines, a weak dollar, and other factors.
He also struck a note of “cautious optimism” and said oil markets are set for “a strong rebound in 2021.” He said OPEC+ is taking a flexible approach to market conditions.
According to the OPEC+ agreement last year, the group was supposed to bring 2 million bpd back to the market from January 2021, but the Organisation had to pause the decision due to second-wave of lockdowns imposed across several countries.
The largest exporter within the group, Saudi Arabia, has voluntarily reduced its production by 1 million bpd for January and February.