Well, let me put it in two ways Jeffrey. Looking backwards they are like the cat
that's got the cream. It has worked stunningly. Looking forward they are really really concerned.
This is the deal originally, basically this is the deal.
You can see two dates on there, we were in OPEC for both of these
events in Vienna but the latter one, of course, was an extension to the current
deal which they go on about, which is the declaration of cooperation, which is
unprecedented in terms of compliance. Let's be honest about it,
when they first came up with this deal, plus Russia, who honestly thought
that they would actually comply to this and compliance has been
absolutely stunning, that's why we have these JMMC meetings to keep an eye on
who's complying and who's not. Now there have been certain factors
that have really worked in their favor, like the fact that the Venezuelan oil production has
utterly, utterly imploded under all kinds of reasons, but it's round about half what it could be
and trading at thirty-year lows as well, so that's helped them quite a lot as well.
But the plan has worked because it was one to take these
inventories off that you just mentioned, and two to get the price up.
Well let's face it, we were $44 a barrel, now we're around about $74 a barrel.
We had excesses as you mentioned of 340 million barrels of OECD reserves
above the five-year average, now they are at the five-year average
and mission accomplished is what the IEA said.
But is it now about price, is it about price for Saudi and we'll talk
about why it might be priced for Saudi in a moment after we hear from the oil minister,
who I caught a couple of words with, literally a couple of words with, last night.
Thank you very much indeed for inviting us thank you very much, it's fantastic,
my first time so thank you. Looking forward to tomorrow sir?
Of course, of course, everybody is.
Things are in quite a good state for Saudi at the moment, so you happy with the price?
We're not here to talk price, we're looking at fundamentals
and that's the topic of the meeting tomorrow.
I will let you know after the meeting. Enjoy Jeddah.
See, I think we are thinking about price beneath the surface. No one at OPEC will tell you
I want it to be this price, I want it to be 60 bucks, 70 bucks, 80 bucks, 100 bucks,
but we know that the Aramco IPO is delayed, we know that Mohammad bin Salman
is expecting a higher price and there are two trillion dollars for that as well.
How they're going to get that, well possibly with a higher oil price as well.
So although the fundamentals have massively improved
in terms of the broader supply and demand in the oil market
the question remains, why would the deal still continue if indeed they have,
as Reuters says, as the IEA says, as pretty much OPEC thinks more generally,
the inventory excess has gone. So is it about price now, is there a
price target, and it's something we've talked about for years here at OPEC as well.
Now I spoke to, actually the longest serving oil minister in the business,
his name's Mohammed bin Hamad Al-Rumhi, now he's the Omani oil minister
and we spoke to him first on CNBC yesterday
and I said to him is this about getting the price to $100? Let's listen in.
Well you're talking about $100, nobody else is talking about $100,
and 70 is not near a hundred by the way. If we were at 90, yes. I think we're a long way.
I don't think we need to overreact and talk about a $100 scenario.
$70 I think is subject to fluctuation, I think 65 to 75 is more realistic numbers
for the rest of the year, but there are so many factors that could change that.
Is there such thing as a fair price for producers and consumers from
Mr Beaudry to Mr Khalil to Mr Miami, over the years I've heard different levels
from different ministers and different OPEC presidents,
is there a fair level in 2018 for consumers and producers?
It's a tough one really, production cost varies from place to place
type of oil, it's very difficult to put a number. Our economic needs
for producer exporters vary from country to country,
so if you ask all 24 of us who sign that declaration of cooperation
you'd probably get 24 different prices, there were fair prices, if we want to be honest.
In my opinion, where we are is not too bad and we can live with it, 65 to 75, give or take
a few dollars here and there, for the foreseeable future, but it all depends really.
Just one more if I may. There are some who are saying you may have won on price,
but actually you're losing on market share, or at least OPEC is losing
on market share. What do you feel about those kind of comments?
I don't have actually, I don't believe in market share. I know others do, but I don't
believe in market share. Market share is something that Nokia and Apple should
worry about, because they are producing different products.
We have the same product, it's too complicated I think. I would rather produce half what
I'm producing at $70 than produce twice as much as I'm producing today
and sell it for $30 but I get 80% of the market share, it doesn't mean much to me.
To me actually it's the final number, the final, actually, revenue that I get
is more important than the percentage of market share.
But maybe others have a different view on that.
That was Mohammed bin Hamad Al Rumhi, the Omani oil minister,
the longest serving oil minister in the business actually, after Mr Naimi
obviously quit a couple of years ago talking yesterday, and here's the thing
that Mr Draghi might never have to worry about: the exit strategy, because
the fact of the matter is, they've succeeded in what their initial goals were,
what next? And of course chaos on the oil markets if they do pull out,
if everyone does go full tilt again, that is the big question. So I think what is more
likely to happen is they're going to change the terms of engagement
and probably go forward with the June meeting, because this isn't the full OPEC don't forget,
the June meeting and say we're going to potentially continue beyond the end of 2018.