The Organization of Petroleum Exporting Countries can do little to halt the oil price decline on its own and needs producers from outside the group to help reduce global supplies, Algeria’s Energy Minister Salah Khebri said.
“A supply reduction by OPEC alone cannot really guarantee a return to oil market stability,” Khebri added at an event in Algiers, according to Liberte newspaper.
As the 12-member group of crude producing nations accounts for 40% of the world’s supply, “there should be steps taken within OPEC and with non-OPECs”, Fuelfix reported.
Khebri called earlier this month for an OPEC emergency meeting because of the continued decline in oil prices, which dropped by half from a year ago amid rising US oil and gas production and account for about 60% of Algeria’s budget revenue and 95% of its export income, according to the International Monetary Fund.
“Algeria doesn’t have the financial muscle of [Persian] Gulf Arab oil exporters,” Robin Mills, a Dubai-based analyst at Manaar Energy Consulting, said by email. “Unlike Iran or Iraq, it does not have the capacity to raise crude output; it is a relatively small, high-cost and declining oil producer among its OPEC peers.”
“The country can increase its oil and gas output, and has renewable energy development projects, but that is more of a medium-term perspective,” Francis Perrin, director of Paris-based energy consultants Stratener, said in an email.
“In the short term, Algeria’s only solution is to dip into the currency reserves.”
Algeria’s foreign reserves fell 18% to $158.4 billion in March, the last month when the figures are available on Bloomberg data, from a year earlier.
With a population smaller than Algeria and oil production at 10.5 million barrels a day, Saudi Arabia’s reserves dropped 8% over the same period to about $667 billion.
