OPEC Secretary-General Haitham al-Ghais speaks during a panel at the Abu Dhabi International Petroleum Exhibition & Conference (ADIPEC) in Abu Dhabi on November 4, 2024. (Photo by FADEL SENNA / AFP) (Photo by FADEL SENNA/AFP via Getty Images)
Fadel Senna | Afp | Getty Images
OPEC Secretary General Haitham al-Ghais on Thursday dismissed the International Energy Agency’s prediction of a supply glut brewing in oil markets.
The International Energy Agency said on Wednesday that a lasting resolution to the conflict could drive a surge in supply volumes and trigger a major oil overhang next year.
Its report said supply is expected to surge by 8 million barrels per day while demand rises by 2 million barrels per day in 2027.
But OPEC’s al-Ghais rejected the forecast in an exclusive interview with CNBC on Thursday.
He told CNBC’s Dan Murphy that “sometimes it’s best not to make such assumptions when they are not really based on facts and figures.”
“What does the IEA see that OPEC and the rest don’t see?” he said. “[We focus] on fundamentals and not putting many ifs and buts in our forecasts, but rather focusing on actual numbers.”
“We’re not about making a fancy headline that will be catchy. Sometimes it’s best not to make such assumptions… when they are not really based on actual facts and figures.”
“Ultimately, these headlines only create more volatility.”
Markets watch as ‘critical’ Strait of Hormuz reopens
The secretary general’s comments come as investors weigh how an agreement between the U.S. and Iran to end the Middle East conflict, and a potential reopening of the Strait of Hormuz, will impact energy markets.
The U.S. and Iran signed a 14-point memorandum of understanding on Wednesday.
The deal sees both sides commit to further talks to reach a final agreement over the next 60 days and includes a $300 billion plan for Iran’s reconstruction, as well as the removal of “all types” of U.S. sanctions against the Islamic Republic.
Under the agreement, Iran says it will allow the safe passage of commercial ships without tolls for 60 days only. The country will then hold talks with Oman “to define the future administration and maritime services” in the Strait of Hormuz in discussion with the other Gulf states.
Al-Ghais said OPEC “welcomes and appreciates” the diplomatic efforts that led to the deal, but added that there are “many moving parts,” meaning it is “premature” to judge the outlook.
“I think what the last four months have really proven is just how critical that waterway is not just for OPEC producers, but for Middle Eastern producers and global energy markets,” he said.
