JOHANNESBURG, SOUTH AFRICA, 1 NOVEMBER 2021 — Since the commencement of the COVID-19 epidemic and consequent lockdown limitations, global oil supply and demand have seen major variations. As economies gradually reopen, demand for the resource has increased, which, combined with low wind levels and Europe’s ongoing gas crisis, has resulted in major price increases around the world as countries battle for supply. Crude futures surged 70 cents to $84.42 a barrel on Monday, November 1st, 2021, prompting Western nations to push for a boost in production to alleviate rising prices and create a strong economic rebound.
As a result, the African Energy Chamber (AEC), as the voice of the African energy sector, advises member countries of the Organization of Petroleum Exporting Countries (OPEC) to maintain production levels and not react hastily ahead of crucial meetings in November. Rather, by cooperating, OPEC members may achieve a mutually beneficial outcome in the face of rising prices.
The COVID-19 pandemic has had a severe impact on the African continent, with the health crisis diverting capital spending and depleting government resources that must be replenished. OPEC member countries and significant African producers stand to benefit as global oil demand rises. Ahead of the 22nd OPEC and non-OPEC Ministerial Meeting, which will take place on November 4th, 2021, and African Energy Week (AEW) 2021, which will take place on November 9th-12th, the AEC encourages producing nations to collaborate, especially as policymakers and organizational leaders work to ensure that producing nations capitalize on revenue while global demand is met.
“Now, more than ever, Africa needs its oil earnings to help it recover from COVID-19. Faced with rising prices as a result of increased demand, the continent must take a cooperative approach to ensure that resources are monetized while demand is met. OPEC member countries must cautiously and collectively negotiate the complex post-COVID scenario, rather than hastily boosting output, according to NJ Ayuk, Executive Chairman of the AEC.
OPEC members have already agreed to progressively increase output levels. Despite appeals from the West for a greater increase, the November 4th meeting is likely to result in the current OPEC production plan of an increase of around 400,000 barrels per day. African oil companies gain from keeping output plans because it allows for a faster post-COVID-19 recovery across the continent.