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Opec chief says collective decision to cut output was ‘the right move’

Crowd, Person, Man Opec
Al Ghais said the group and its allies were not targeting oil prices but focusing on market fundamentals

Opec secretary general Haitham Al Ghais said the collective decision to cut output in October was the right move and added that credit should be given to the Opec+ alliance for its constructive role in supporting global market stability.

“Due recognition should be given for our constructive and positive role in supporting global market stability including to remind ourselves that the G20 and major consumers around the world commended us for our historical actions taken since 2020,” Haitham Al Ghais told Reuters on the sidelines of the India Energy Week conference.

Opec+, an alliance that includes members of the Organisation of Petroleum Exporting Countries (Opec) and others including Russia, agreed last year to cut its production target by two million barrels a day (bpd), about two percent of world demand, from November until the end of 2023 to support the market.

The October decision initially drew heavy criticism from the United States and other Western countries but market dynamics since then have shown the cuts to be prudent with oil prices hovering near $85 a barrel from highs of above $100 in 2022.

“We held the JMMC meeting on February 1 where we reviewed everything holistically, from a pure technical perspective, and came to the conclusion that the decision taken collectively in October was the correct decision,” Al Ghais said.

The main message from the Opec+ panel that met last Wednesday was that the group would stay the course until the end of the agreement in 2023.

Saudi energy minister Prince Abdulaziz bin Salman said on Saturday he remained cautious about any increase in production.

“At Opec+ we are always closely monitoring the market, including demand, as it evolves after China opening up,” Al Ghais said.

“We believe there is great confidence and trust in the Opec+ group and its decisions where we have proven time and again that we are ready to act immediately and respond to the dynamic nature of the market,” he said.