New OPEC Secretary General Haitham Al Ghais said in a statement last week that that ‘chronic underinvestment’ in oil and gas is responsible for rising inflation, adding that OPEC shouldn’t be blamed for soaring prices.
“OPEC is not behind this price increase,” Al Ghais told CNBC.
“There are other factors beyond OPEC that are really behind the spike we have seen in gas [and] in oil. And again, I think in a nutshell, for me, it is underinvestment — chronic underinvestment,” he added.
Earlier this year, Al Ghais — Kuwaiti oil technocrat and well-known OPEC figure — was appointed for a three-year term as OPEC’s secretary general. He succeeds oil industry veteran Mohammad Barkindo, who died at the age of 63 last month just days before he was due to step down from the organization.
Al Ghais has advised six Kuwaiti oil ministers on oil market developments in recent years and has previously been a leading member of Kuwait’s delegation to OPEC meetings.
Al Ghais’ comments follow OPEC+’s decision on August 3 to add only 100,000 barrels per day from next month.
The group cited severe limitation of excess capacity for its move that left the market surprised.
Commenting on the decision, Al Ghais said that “OPEC is doing its part” and is in no way responsible for driving up inflation.
We have been increasing production in line with what we see and a gradual mechanism that has been very transparent … We are doing everything we can to bring the market back to balance but there are economic factors that are really beyond OPEC’s control,” he added.
OPEC’s ‘solid’ relationship with Russia
“Russia’s leadership in supporting the declaration of cooperation has been clear since day one, since 2017. The relationship is solid in terms of managing the market,” Al Ghais said.
Al Ghais also said that OPEC has a “solid” relationship with Moscow and that it always seeks to separate politics from its market of stabilizing the markets.
“We try always in our meetings to separate the politics and the political aspects from what we do in terms of managing the market balance and in terms of what we do as OPEC+, I think the methodology is clear,” he continued.
