No Need to Reach Oil Freeze Deal at Next OPEC Meeting

No Need to Reach Oil Freeze Deal at Next OPEC MeetingNo Need to Reach Oil Freeze Deal at Next OPEC Meeting

Former secretary-general of OPEC, Rene G. Ortiz, said the upcoming meeting between the members of the organization and non-OPEC states in June need not result in a decision to freeze oil production at January levels.

On June 2, Vienna is expected to host the 169th OPEC meeting to discuss the current state of affairs in the global oil industry. Several non-OPEC states, such as Russia and Oman, are expected to participate in the meeting.

"The June meeting of OPEC member states and other producers of cheap oil will not be required to make any decision on freezing output at the January 2016 levels, since the market will take care of leveling prices at around $40-50 a barrel," Ortiz told Sputnik on Tuesday.

He added that by the end of 2016, the market would see a decline of some 1.9 million barrels a day as producers of expensive-to-produce shale and deepwater oil, primarily in the United States, would be forced out of the market because they will not be able to compete with cheap oil from the Persian Gulf states.

Oil prices have plunged more than 60% from their peak of over $110 a barrel in June 2014 due to global oil production outpacing demand.

In April, OPEC and major non-OPEC oil producers failed to agree on freezing oil output at January levels to shore up prices after Saudi Arabia backed out of a deal, insisting that Iran, which has been boosting oil production after years of international sanctions, should be part of any production cut.