The Saudi Arabian Energy Minister, Mr Khalid al-Falih, today flew to Abuja to meet with his Nigerian counterpart, Emmanuel Ibe Kachikwu, ahead of two very important OPEC meetings scheduled to hold in just a matter of days.
Mr al-Falih, who did most of the talking during the brief meeting, admitted that the global oil market has been through a volatile period since the past three weeks; a situation he said was amplified by geopolitical tensions and the speculative activities of financial investors.
These events have led to a drastic decline in crude prices, with Brent Crude currently hovering between $59 and $60 per barrel. This is quite less compared to what obtained in September for instance, when speculations were rife that price would reach the $100 range.
With this in view, the Organisation of Petroleum Exporting Countries (OPEC), of which both Nigeria and Saudi Arabia belong, has been considering the best way to stabilise the market.
The Saudi Minister said his visit to Nigeria today is highly imperative because Nigeria is an important player in the global oil market.
With that in mind, therefore, his meeting with Ibe Kachukwu is a consultation ahead of OPEC’s meetings scheduled for November 30th at the G20 in Vienna, and yet another OPEC meeting scheduled for December 6th.
He also stated that Saudi Arabia is optimistic that after the meetings, a consensus will be reached to stabilise the volatile oil market before 2019 is here.
In his words
“Our consultation here is very important ahead of the OPEC meetings. We believe that the series of consultations we’ve had in Abu Dhabi and the series of consultations with Iraq, Libya, and Russia will lead us to a consensus. And once again, I have confidence that the producers who will be gathering in Vienna will do the right thing.” –al-Falih
It should be noted that a possible decision by OPEC would be to cut supply, a move that would reduce crude supply in the international market and by so doing, push up prices.
This is not a new move for OPEC which has previously implemented production cut in 2017, even though Nigeria was exempted due to low output caused by internal unrest. The country will not be exempted this time around, seeing as its production output has since recovered.