The African Petroleum Producers’ Organization (APPO), the umbrella body for African oil-producing countries, has expressed its support for the output cut deal that was reached during the 9th OPEC and non-OPEC Ministerial meeting which held on Thursday, April 9, 2020.
This is a clear boost to ongoing efforts aimed at solving the global oil crisis that was caused by the Coronavirus outbreak and a price war between Saudi Arabia and Russia. APPO’s support was disclosed in a communique, which was sent out to all stakeholders by the organisation’s secretariat on Thursday, April 9, 2020.
The Petroleum Ministers and Representatives of member countries of APPO have decided to support the various processes being undertaken by all parties to address the challenges posed by the Coronavirus pandemic and the volatility of the global oil market.
They decided to offer their support after the following considerations:
- Reviewing the global oil situation, characterized by huge volatility in the global oil market since December 2019 primarily due to the coronavirus pandemic.
- Recognizing the impact of this volatility on the economy of our respective countries.
- Recognizing the major role of OPEC in the stabilization of the international oil market.
- Consideration of the exceptional health and socio-economic impacts of this coronavirus pandemic in Africa and around the entire world; and
- Recognizing the fact that the solution to the coronavirus pandemic cannot be national but global.
Apart from the support offered to OPEC and non-OPEC member countries, APPO also acknowledged other global oil producers for their efforts at ensuring the long term stability of the global oil market. Some parts of APPO’s statement said:
“Furthermore, we urge the G20 countries to offer assistance to Africa as we struggle to wade off this pandemic and price stabilization process in the oil markets and encourage the most equipped laboratories and medical institutions in the world to find effective measures accepted by all (proven and consensual scientific results) to rapidly eradicate the progression of the current COVID-19 pandemic.’’
Recall that following a virtual meeting with OPEC and OPEC+, Saudi Arabia and Russia finally struck a 10 million barrels per day oil cut over a 2-year period as part of the measure aimed at tackling the current global oil crisis.
However, in another twist to that, Mexico rejected the terms of the deal, as it refused the 400,000 barrels per day oil cut which it was allocated, as against the 100,000 barrels per day it had proposed. This appears to be another setback to the oil cut deal.