The goal, for both producers and consumers, must be a stable price

Caspian Energy (CE): Your Excellency, OPEC has been operating for 53 years and has grown in prominence over this period. What will be the role of OPEC in the coming decade? Which global factors will help, and which of them will hinder the further growth of the OPEC’s influence in the global market?

Abdalla Salem El-Badri, OPEC Secretary General: It is important we look to the past when thinking about OPEC in the coming decade. From when OPEC was founded in 1960 its overall goal has been market stability. It is not only the best type of market for OPEC, but for all stakeholders. And this will continue to be the Organization’s goal on a daily, weekly, monthly and yearly basis. We will continually review the market looking for movements and trends as we seek a stable market, with a balance between supply and demand. Market stability remains central to everything we do.

In the second part to your question you use the term “influence”. Here, let me reiterate that the only influence we look to achieve is in terms of market stability. So I think it is better to look at this part of your question from the perspective of the uncertainties, challenges and opportunities for the oil industry in general.   

On the demand side, the global economic situation continues to be the main worry. It is important that the world returns to sustainable and healthy economic growth rates. 

We do see a higher economic growth rate in 2014, compared to 2013, but it is important this is maintained. The industry needs to continually monitor the emergence and expansion of the ‘paper oil’ markets, specifically regarding excessive speculation and extreme price volatility.There are the ongoing UN climate change negotiations with their possible impact on the energy sector still unclear. There are energy policies, which need to be feasible, predictable and sustainable. For producers, it is critical to have a better understanding of demand side developments, particularly policies that discriminate against oil. If not, it can lead to investment uncertainty, and in turn, future market instability. There is the impact of rising industry costs. And there are also advancements in technology, that are enabling us the industry to continually push the boundaries of what is possible and extending the reach of the industry.

This is not an exhaustive list, but underlines some of the uncertainties, challenges and opportunities for the industry in the years ahead.