02:30 GMT05 December 2020
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    The instability in a range of oil-producing countries can drive them to decreasing oil production, United States Energy Association (USEA) Executive Director Barry Worthington told Sputnik.

    HOUSTON (Sputnik) Global oil prices plunged from $115 to less than $30 per barrel between June 2014 and January 2016, hitting their lowest levels since 2003.

    Asked if the oil prices will start to climb soon, Worthington said, "Eventually, yes… It could be very soon."

    "There are a lot of geopolitical activities that could interfere with the markets. You could have instability in any number of countries that would reduce their production," he explained.

    Many oil-producing countries are going through turmoil with Syria and Iraq being hit the most by the advance of the Daesh.

    "I can say that if you look back over history we have seen a constant cycle of both oil and gas prices on a rollercoaster," Worthington added.

    At present, a number of countries are negotiating an oil production freeze in a bid to stop the fall in oil prices. On February 16, Russia, Saudi Arabia, Qatar and Venezuela held talks on the current oil market situation in the Qatari capital of Doha. They agreed to proceed with an output freezing initiative if other countries followed suit.

    Worthington noted however, that the opening of Iran’s oil market for exports can become a stumbling block in the negotiated freeze of world oil production.

    “Efforts like this have not always worked in the past. I think one of the larger issues right now is that the potential agreement has no influence on the lifting of sanctions [against Iran],” Worthington said.

    Barry Worthington also spoke about the prospects of new oil and gas drilling in the Gulf of Mexico.

    Earlier in February, the Bureau of Ocean Energy Management (BOEM) announced that the US administration intends to offer about 45 million acres in the Gulf of Mexico for oil and gas development during two lease sales in March.

    "I would think there would be less enthusiasm today than what it would have been two years ago," Worthington said. "With prices the way they are right now, a lot of companies are not looking to expand investments, and it’s probably a bad time to be doing the leasing."

    The USEA director explained that ventures in the Gulf of Mexico are costly since it is a tough terrain and the rigs are expensive.

    "Now, they don’t have to go through with the leasing though if they get the bids in and either too few companies bid or they don’t believe that the bids are adequate, representative of what the value is," he said.

    In that case, the BOEM can choose not to accept the bids and postpone the decision for some time, Worthington continued.

    "Say they only had three companies that bid, where they might normally expect 20 or 30, and the bids are all very low, they can choose not to complete the lease sale and postpone it for two years or five years or six months or whatever decision they come to," he said.


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    production freeze, oil prices, US Bureau of Ocean Energy Management (BOEM), OPEC, Iraq, US
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