- The OrganiOPEC is an intergovernmental organization of 13 nations.
- Norway refused to extend restrictions on the oil production from the 2020.
- Norway will increase production at the Johan Sverdrup field.
Norway announced the internet to increase the oil production and export starting January 2021. Hence, this will be a 3rd nation, which will not follow the OPEC+ agreement. The OPEC+ agreement called for a decrease in crude oil output by an initial 9.7 million barrels per day (b/d) that gradually tapers through April 2022, the end of the current agreement period.
The Organization of the Petroleum Exporting Countries is an intergovernmental organization of 13 nations. Founded on 14 September 1960 in Baghdad by the first five members, it has since 1965 been headquartered in Vienna, Austria, although Austria is not an OPEC member state.
Furthermore, Norway refused to extend restrictions on the oil production from the 2020. As the country’s authorities noted, the actions taken in 2020 by OPEC and other fuel exporting countries to stabilize the market played an important role.
Norway is not part of the OPEC+ deal and was not invited to the meeting of its participants, so it has every right to increase production of raw materials.
Moreover, Norway will increase production at the Johan Sverdrup field. The Johan Sverdrup oil field is an oil field in the North Sea, about 140 kilometres west of Stavanger, Norway.
The field lies in two different production licenses and consists of two different discoveries called Avaldsnes and Aldous Major South.
The field produces 4.4 million barrels per month. There has been an increase of the oil production by the 6% since November. It should be noted, Norway is not the only nation to ignore the OPEC+ agreement.
UAE recently discovered a new field that supposedly contains two billion barrels of oil. The reports claim that there also deposits of the unconventional oil with a volume of the 22 billion barrels.
The deposits of the unconventional oil are the resource that are located in the difficult geological locations with the extraction Therefore, the UAE volume of the raw materials would reach 107 billion barrels.
Mexico and Iraq have not been complying with OPEC+ agreement as well. Perhaps, in 2021 the OPEC+ agreement will cease to exist due to the lack of the compliance.
However, Norway did postpone the development of the new fields until 2021. The measure was voluntary and Norway is not extending it.
Norway believes that it has done enough to aid in the oil price stabilization around the globe in the 2020.
Interestingly, Denmark announced the halt of the oil production by the 2050. The move is to aid our planet and to avoid further climate change.
Overall, it is highly likely the price of oil in the 2021 will drop significantly. It is plausible, there will be more of the oil supply vs the demand.
Russia would experience significant losses, if the price of oil drops. Compounded with the large economic losses due to the Coronavirus pandemic. Additionally. Russia has entered recession.
In conclusion, OPEC might not exist for much longer. Majority of nations are growing tired of the restrictions and the compliance factor. Therefore, Saudis might not be able to have much control over oil production in the near future.