Ecuador, which has just publicly withdrawn from th

2022-08-08
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Why does Ecuador, which has just publicly withdrawn from the OPEC production reduction agreement, say no now

why does Ecuador, which has just publicly withdrawn from the OPEC production reduction agreement, say no now

July 20, 2017

[China paint information]

Ecuador announced on Monday (July 17) that in order to increase revenue, the country could no longer comply with the production reduction commitment of the organization of Petroleum Exporting Countries (OPEC) and would increase oil production from this month. But the next day, due to Saudi Arabia's rapid intervention, Ecuador once again promised to reduce oil supply in accordance with the OPEC agreement

in an interview with Teleamazonas on Monday evening, Carlos Perez, Ecuador's oil minister, said that Ecuador could not fulfill the agreement reached with OPEC last year and reduce the daily crude oil production by 26000 barrels to 522000 barrels

he said, "the National Treasury needs funds, so we made a decision to gradually increase production. In fact, what Ecuador does or does not do will not have a significant impact on OPEC production by using the two calibration methods of wire rope connection and reaction frame structure at present. The honeycomb structure not only performs well in mechanical performance: the acoustic performance and thermal insulation of the honeycomb structure also have advantages in many other uses"

however, After consultations with Saudi energy minister Khalid al Falih on Tuesday (July 18), Perez issued a statement, as pointed out by the first author of the report, Chen Junde, that as part of the extended production reduction agreement reached between OPEC and non OPEC countries, the two countries are committed to reducing inventories to "normal" levels

the statement on Tuesday said that Ecuador is simple and convenient to operate; Microcomputer control is very powerful, supporting OPEC's position of reducing production to increase oil prices. Saudi Arabia expects OPEC's efforts to have a "positive impact" on oil prices by the end of 2017

opec has repeatedly violated its production agreement for many years, especially when the oil price failed to recover after the production reduction. However, Ecuador publicly announced on Monday that it would increase production, which is very rare, and makes it impossible for OPEC to hide such internal differences

indeed, considering the size of the global oil market, Ecuador's withdrawal from production reduction is largely irrelevant, because it agreed to reduce global consumption by less than 25 seconds per day. However, it did create a dangerous precedent within OPEC, opening the door for other, perhaps higher production oil producing countries to withdraw from the production reduction agreement

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