China and OPEC: “milestone discussion” on oil supply for COVID-19 era

The meeting reflected on the impact of the COVID-19 pandemic on the global economy and oil market, as well as China’s domestic oil market, the rebalancing process of oil supply and demand, and China’s solutions for and optimisation of the oil and gas trade system.

The meeting also reached a consensus on the importance of energy security and maintaining stability in the energy markets, strengthening collaboration between OPEC and China, as well as supporting and promoting the unique importance of multilateralism and globalisation.

HE Barkindo and HE Zhang last met in October 2019 at the 3rd High-Level Meeting of the OPEC-China Energy Dialogue, held at the OPEC Headquarters in Vienna. The meeting laid a solid foundation for future co-operation and participants were enthusiastic about the deepening dialogue between OPEC and China. “…the pandemic has provided the opportunity to further strengthen this relationship, and proven that the forces of globalisation are irreversible,” Secretary General Barkindo stated in a webinar meeting, adding the “rich lessons we are currently learning from the pandemic make it abundantly clear that the triumph of multilateralism and international cooperation cannot be disputed.”

HE Barkindo referred to recent decisions taken by participants of the Declaration of Cooperation at the 9th and 10th (Extraordinary) OPEC and Non-OPEC Ministerial meetings held on 9 - 10 and 12 April 2020, respectively, to adjust overall crude oil production by 9.7 million bpd for May and June, 2020; from 1 July 2020 to 31 December 2020 by 7.7 million bod; and from 1 January 2021 to 30 April 2022 by 5.8 million bpd.

HE Zhang stated the webinar meeting comes at a crucial time, when the world is in the throes of the COVID-19 pandemic. However, he said China is already on the road to recovery. The country hopes to regain its former energy consumption patterns soon, which should help support the oil industry. He added China wants to work closely with OPEC to stabilise the global oil industry, ensure future energy security for the world and facilitate the energy transition.

He thanked the Secretary General for OPEC’s support of China in the fight against COVID-19. HE Zhang stated the pandemic’s outbreak brings unprecedented changes to the oil and gas industry, and expressed that the historic decision by OPEC and non-OPEC participating countries in the Declaration of Co-operation (DoC) on production adjustments will play a positive role in stabilising the global oil market.

vHE Barkindo praised China’s handling and containment of the COVID-19 pandemic, stating it has saved millions of lives, and has set an example for the rest of the world, which now looks to China for guidance.

China and OPEC share great complementarity, said HE Zhang, as OPEC Member Countries are the largest exporters of petroleum to China and China the world’s biggest importer of oil. Thus, he stated the two parties should work together both today and tomorrow to deepen their dialogue, adding that strong collaboration is not only essential for the interests of both, but also for the global economy.

HE Zhang clarified three elements that would help the global economy get back on track post-COVID-19: Optimising the trade system to consolidate and expand oil trade; enhancing communication to keep the energy market stable; and strengthening pragmatic cooperation to extend the industrial chain, including oil products, storage and transportation. Ambassador Wang stated that a return of stability to energy markets and the world economy is urgently needed on the basis of international market rules, and called for international efforts to minimise the impacts of politicising factors in this regard.

The meeting was the 11th in a series of OPEC Secretariat briefings with key stakeholders centring on COVID-19-related impacts on the global economy and oil market.

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