By Anthony Di Paola and Mahmoud Habboush
Prices could be back to “normal” within a year or two as cuts approaching 10 million barrels a day drain excess barrels from the market, Mazrouei said during the call hosted by the Atlantic Council.
“We have seen very good signs of demand picking up,” Mazrouei said. “We have seen numbers of driving vehicles are picking up,” he said, citing demand growth in China, India and Europe.
The OPEC+ group agreed to cuts in April to counter the coronavirus pandemic’s impact in decimating oil demand and last week extended the reductions through July. Led by Saudi Arabia and Russia, the group aims to support a rally that’s seen Brent crude more than double to almost $40 a barrel since late April. That success depends on all OPEC+ members meeting their quotas, as well as on producers outside the group not resuming production growth too quickly, Mazrouei said.
“In previous deals we had countries cheat because there was no rule. Now there is a rule, so countries are coming and stating their commitments,” Mazrouei said. The agreement has effectively created a “permanent” group of countries that will coordinate to manage crude markets.