Organization of the Petroleum Exporting Countries (OPEC) Secretary-General Haitham al-Ghais said Thursday that the International Energy Agency (IEA) must be “very vigilant” about undermining investments in the oil industry, which is important for global economic growth.
Senior members of OPEC and its allies announced crude output cuts earlier this month, drawing criticism from the International Energy Agency, which said the move was fueling inflation.
Al-Ghais pointed out that statements calling for not investing in the sector may lead to fluctuations in the oil market in the future.
Al-Ghais added that OPEC and the OPEC+ alliance are not targeting oil prices, but rather focusing on market fundamentals. Pointing the finger at oil exporters and their allies and distorting their actions would be “counterproductive”, he said.
Read: Here’s why OPEC market share in India is shrinking
The executive director of the International Energy Agency, Fatih Birol, criticized the announcement of the “OPEC+” alliance to reduce production by 1.66 million barrels per day from May to the end of 2023. Birol said in an interview with Bloomberg on Wednesday that OPEC should be cautious about pushing oil prices higher because this would lead to a slowdown in the global economy.
Al-Ghais said on Thursday that blaming oil for inflation was “fallacious and technically incorrect”, and that it was repeated calls from the International Energy Agency to stop investing in oil that would lead to market volatility.
“If there is anything that will lead to volatility in the future, it is the International Energy Agency’s repeated calls to stop investing in oil, knowing that all data-driven projections indicate that greater quantities of this precious commodity are needed to boost economic growth and prosperity around the world, particularly in the developing world.”
In parallel, Russian Deputy Prime Minister Alexander Novak was quoted by Interfax news agency as saying that there was no need to approve additional oil production cuts beyond what major producers had already agreed on, as the global crude market was in equilibrium.
Russia is a member of the OPEC+ alliance of oil-producing countries.
“We took this decision only a month ago, and it will take effect from May for countries that have voluntarily joined the cuts,” Novak was quoted as saying in Moscow. He added that voluntary cuts would be supportive of the market in the event of a disruption.
He also said Russia had reached its oil production target this month after announcing a production cut of 500,000 barrels per day, or five percent of its output, until the end of the year.
For more on OPEC, Click here.
