In an interview to Russian news agency Tass, H E Rumhi said that oil producers need to be more rational and live in the current environment with a price of around US$60 per barrel. “Every producer needs $80 per barrel compared to US$60, but is it reasonable? Probably not, not in the current circumstances.
“We need to move with the current economic environment. I would enjoy seeing oil grow from US$60 to US$80, but it’s highly unlikely,” Tass quoted H E Rumhi as saying.
H E Rumhi was in Abu Dhabi on Monday to attend an energy conference.
Tass reported that as per the forecast by international rating agency Fitch, the price of oil in 2019 will be US$65 per barrel. For many Middle Eastern OPEC members - in particular, the UAE and Kuwait - this price is quite comfortable, analysts said, with the exception of Saudi Arabia, for which a deficit-free budget starts at US$80 per barrel.
According to economists Oman needs prices at US$85 per barrel to balance the budget. Oman has projected a deficit of around RO2.8bn based on assumptions that prices average around US$58 per barrel.
According to global news agencies, the OPEC+ Russia and others output reduction deal remains in effect until the end of March 2020 and is designed to stabilise oil prices. Saudi Arabia is the largest oil producer in OPEC, and is the leader of the OPEC+ agreement along with Russia.
In total, the countries participating in the agreement should reduce production by 1.2mn barrels per day against the level of October 2018. The main reduction quotas fall on the largest parties to the agreement - Russia and Saudi Arabia (228,000 and 322,000 barrels per day, respectively).