OPEC+’s decision to reduce oil production by 2 million barrels per day, entering into force in November, comes after several months of a steady increase in production, we cite OPEC+’s decision to increase production by 100 thousand barrels per day, last August.
The economist Mohammed Jadri revealed to Barlaman Today the implications of OPEC+’s decision. The expert stated that Morocco was importing all its petroleum needs from abroad. Therefore, any rise in a barrel of oil between $90 and $95 dollars will affect the national economy, because the Finance Law project of 2023 relies in its assumptions on a price that does not exceed the mentioned prices.
Jadri went on to explain that the decision of OPEC+ to reduce its production by 2 million barrels per day is the oil cartel’s reaction to the expected economic stagnation. This will enable it to maintain the prices of a barrel of crude oil within reasonable limits for the organization.
The economist points out that OPEC+ had cut its production by raising crude oil prices, but not as high as the ones the world witnessed in 2022, for two reasons.
The first is that most states are pursuing monetary policies to counter global inflation. Thus, global demand for oil products is expected to decline in the coming year. The second concerns the United States of America, which supplied 10 million barrels of oil to the international market during the month of November as a response to OPEC+’s lack of commitment not to reduce its production.
To remedy the situation, Mohammed Jadri stated that the government is now required to accelerate the introduction of competition laws that would bring about genuine competition among the 29 actors/players in Morocco’s hydrocarbon sector. This would also mitigate the impact of this rise on the purchasing power of citizens, especially those with low incomes and middle class.
Moreover, the expert stressed that the government ought to translate scenarios regarding the SAMIR oil refinery into reality since operating the station will raise our storage capacity as well as maintain our reserves of hard currency.
Mohammed Jadri called, in his statement, to continue working on everything related to renewable energy projects, such as solar and wind energy and seawater desalination, to reduce this excessive dependence on international oil markets.