The global economy and oil markets will not see a quick recovery next year, Algerian Energy Minister Abdelmadjid Attar has cautioned at a meeting of the Organisation of the Petroleum Exporting Countries (OPEC).
The 13-country cartel met for online talks on delaying an oil production increase that OPEC and its Russia-led allies, jointly known as OPEC+, had planned for the start of 2020.
After several hours, the talks were adjourned until Wednesday, when the entire OPEC+ group is scheduled to hold a videoconference.
“Reaching an agreement will be difficult,” Iranian Oil Minister Bijan Namdar Zangeneh said, according to the Iranian energy news service Shana.
OPEC president Attar told fellow ministers that recent news of promising COVID-19 vaccine trials offered hope but he warned that the global roll-out of these vaccines would take time and would only fully take effect in the second half of next year.
“The route to recovery is long and bumpy,” he said, predicting that the pandemic will have long-lasting effects.
“The shock for the oil industry is massive and its severe impact will likely reverberate in the years to come,” said Attar.
After the COVID-19 pandemic hurt global energy demand and oil prices earlier this year, OPEC+ decided in April to cut production by 9.7 million barrels per day (bpd), reducing global supply by 10 per cent.
Under the agreed OPEC+ plan, the cut was relaxed by 2 million bpd in August and is scheduled to ease by nearly 2 million bpd more in January.
OPEC heavyweight Saudi Arabia, Russia and other involved countries want to delay the January rise as many major economies are still grappling with a second COVID-19 wave.
Oil prices fell on Monday as markets reacted to reports that producers within the OPEC+ disagree on whether to opt for a simple delay or a gradual increase in early 2021.