Current Oil Market Turbulence Due to OPEC Managing Price

© AFP 2023 / ALEXANDER KLEIN / FILEThe press conference room of the OPEC (Organization of the Petroleum Exporting Countries) is seen at the organization's headquarter on the eve of the 164th OPEC meeting in Vienna, Austria on December 3, 2013
The press conference room of the OPEC (Organization of the Petroleum Exporting Countries) is seen at the organization's headquarter on the eve of the 164th OPEC meeting in Vienna, Austria on December 3, 2013 - Sputnik International
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The present crisis in the global oil market is deeply rooted in OPEC handing the price, LUKoil and PetroChina Board of Directors Member Richard Matzke told Sputnik on the sidelines of the IHS Energy CERAWeek conference in Houston, Texas.

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"If we never had an OPEC or an OPEC equivalent managing price we probably wouldn’t be in all the troubles we have with these ups and downs," Matzke said commenting on the current low oil prices.

The LUKoil board member continued that now it is probably impossible to return to a global oil market that follows exclusively economic rules.

"The energy business, the commodities we deal with, gas, coal and oil are so abundant, so prevalent, and so in need with the number of people we have today, you can not rearrange this thing so it follows normal economic rules," he said.

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At present, Russia and some of the biggest OPEC oil-producers are attempting to negotiate a deal to freeze output at January levels, hoping the action will eventually cause oil prices to rise.

Matzke commented that the major players of the world oil market would have to persuade Iran through negotiations not to overproduce oil, which could hinder the resolution of the current issues in the energy market.

"I think they [major players] will have to work with Iran in some way, shape or form in order to be certain Iran doesn’t go overboard on its own production and preclude a reasonable resolution of today’s problems," Matzke stated.

The LUKoil board member added that by major players of the oil market he means Saudi Arabia, Russia, and the United States that are producing 10 million barrels a day.

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"I think in order to try to manage what Iran does, there is going to be a lot of negotiations between the major players," Matzke said.

In mid-January, the sanctions were removed against Tehran enabling it to become an active actor on the global oil market. At present, Iran is keenly discussing developing the long frozen oil exports with numerous foreign companies that flocked to the country.

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