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Delegates at Africa’s biggest oil conference have expressed concern about rising prices after the Organization of Petroleum Exporting Countries, plus nonmembers who also export oil, decided this week to cut production targets.
The majority of the oil cartel’s 13 member states are in Africa, but many African countries have to import refined oil.
Speaking at the Africa Oil Week conference in Cape Town, Omar Farouk Ibrahim, secretary-general of the African Petroleum Producers Organization, said the move was aimed at ensuring stability in the global market and ensuring that prices don’t fall too low.
“I believe it’s the right thing they did in order to save the industry,” he said, “and I totally think that every country has the responsibility to protect the interests of its citizens. And if by reducing production they see that as in their best interest, so be it.”
Rashid Ali Abdallah, executive director of the African Energy Commission, said it was too early to tell what the impact of the planned cuts would be.
“I hope that the price is not shooting up, because in Africa we depend on oil products in power generation,” he said.
Natacha Massano, vice president of Angola’s National Agency for Petroleum, Gas and Biofuels, said she wasn’t sure how the announcement would affect her country. Angola is one of the two biggest oil producers in Africa; Nigeria is the other, and both are OPEC members.
“Some countries will be affected more than the others,” Massano said. “Some are benefiting — of course, the producers may benefit from the high prices, but at the same time they are paying also for all other commodities.”
Saudi Arabia, OPEC’s biggest producer, has denied colluding with Russia on the production target cut.
However, Herman Wang, managing editor of Vienna-based OPEC and Middle East News, said one couldn’t tell what was discussed behind closed doors. He said he thought the cut was clearly “a big win for Russia.”
“You know that they are trying to raise money for their war effort in Ukraine,” Wang said. “Again, like all these OPEC countries, [Russia is] heavily reliant on oil revenues, and when you have a case where the outlook for the war is quite dire, [Russia is] needing this revenue. And the other impact of this is that higher oil prices make it harder for the West to enforce and impose their sanctions on Russia. So that might have been part of the calculation here for Russia in terms of trying to get this production cut done.”
OPEC+ members said the group would cut production targets by 2 million barrels per day.
U.S. President Joe Biden called the move shortsighted, noting the global economy has been dealing with the negative impact of Russia’s invasion of Ukraine.