the OPEC MOMRDownload App free of charge! • Essential information on the oil market • 100+ interactive articles and tables detailing crude price movements, oil futures, prices and much more • Analysis of the world economy, world oil supply and demand • Compare data interactively and maximize information extraction OPEC Monthly Oil Market Report 12 June 2018 Feature article: World oil market prospects for the second half of 2018 Oil market highlights i Feature article iii Crude oil price movements 1 Commodity markets 9 World economy 12 World oil demand 32 World oil supply 44 Product markets and refinery operations 61 Tanker market 67 Oil trade 72 Stock movements 79 Balance of supply and demand 86 Two watershed years This month’s special edition of the OPEC Bulletin has been between June 2014 and January 2016, paralyzing the industry devoted to commemorating the 2nd anniversary of the landmark with frozen and cancelled projects, hundreds of thousands of ‘Declaration of Cooperation’ (DOC). A little over one year ago, lost jobs and drastic drops in investment. The mood pervading in the November 2017 issue of this publication, we marked the the industry was at an all-time low. overwhelming success of the DOC’s first year with a special When the news of this unprecedented OPEC-non-OPEC issue entitled ‘Forging history.’ cooperation was first announced at the end of 2016, it was Commentary And indeed, at that key juncture, one year into the DOC, initially greeted with a chorus of naysayers who claimed that history had already been made on several fronts — it was a year the Declaration’s goals of rebalancing the global oil market of ‘firsts’: the first production adjustment since Oran 2008; could never be achieved. But, low and behold, as the months the first time participating non-OPEC countries committed to progressed, success steadily prevailed as stocks came down join OPEC in its efforts to re-establish stability in the market and balance was restored. through voluntary adjustments to production; the first time Stakeholders across the entire value chain, in the end, were a Joint OPEC-non-OPEC Ministerial Monitoring Committee won over and overwhelmingly lauded the proactive efforts that (JMMC) had ever been created to monitor implementation of a brought the industry back to life. joint decision; and finally, the first time that a framework for The events of the last two years centred on meeting an sustained, structured and transparent cooperation between immediate and urgent need involving the nuts and bolts of OPEC and non-OPEC nations had ever been established. market fundamentals — the balance of supply and demand — In the pages ahead, we now present a retrospective look and, of course, restoring the stability that is so crucial to future at the historic achievements of the past two years as the DOC growth. continued to blaze a path of stability, helping revitalize and However, when one steps back for a moment and observes transform the international oil industry, bringing it back from these developments from a wider perspective, it becomes clear the brink of collapse. that this is about a lot more than just market dynamics and In addition to our usual coverage of the Secretariat’s activi- outlooks. ties, this special edition features coverage of the two-year his- The historic DOC has virtually changed the way business torical journey chronicling the JMMC’s crucial role in ensuring is done, ushering in a new era of international dialogue and the successful implementation of the Declaration, as well as an cooperation in the global energy industry. in-depth look at how the landmark OPEC-non-OPEC cooperation What was before a go-it-alone, winner-takes-all mentality has impacted the global oil market over the previous two years has now evolved into an approach more akin to ‘how can we of the DOC. work together to achieve our common goals’. And this has made Today, the oil industry, and, by extension, the global all the difference. It has helped knock down barriers and build economy, is generally enjoying the calm after the storm and new bridges of understanding, paving the way for new avenues benefiting from a renewed sense of optimism and stability. of dialogue and collaboration. But the road to get to where we are today was complex and Thus, what started as a rescue operation for an oil market full of challenges and risks. under siege has evolved into much, much more. The Declaration’s American civil rights icon Martin Luther King, Jr once said 24 signatories never imagined in December 2016 how far and “the ultimate measure of a man is not where he stands in wide the impact of their joint decision would reach. moments of comfort and convenience, but where he stands at Now, the concrete has been poured and the foundation is times of challenge and controversy.” firmly set for this global cooperation to evolve and expand, And, indeed, when the chips were down, it was OPEC, along enabling current and future participants to more effectively with ten non-OPEC participating countries, that rose to the occa- meet future challenges and foster market stability, economic sion and had the courage and willpower to take action and come growth and future prosperity. to the rescue of an oil market that in mid-2014 had suffered The wise words of ancient Latin writer and intellectual one of its most severe oil price cycle downturns in history. The Publilius Syrus sum it up well: “Where there is unity, there is OPEC Reference Basket had plummeted by a drastic 80 per cent always victory.” 4 Contents 26 Declaration of Cooperation 4 The journey of the Joint Ministerial Monitoring Committee Oil Market 18 A global oil market transformed JMMC and ADIPEC 26 Abu Dhabi takes centre-stage in busy week for oil industry 30 ADIPEC 2018: Shaping the future of the world’s oil and gas industry 38 A day with the OPEC Secretary General: Engaging the world’s media Spotlight 40 Algeria Future Energy Summit Energy Dialogue 44 EU-OPEC Energy Dialogue convenes in Brussels Symposium 48 Fourth Symposium on Gas and Coal Market Outlooks Forum 50 Equatorial Guinea hosts first-ever joint technical workshop with OPEC Publishers OPEC Membership and aims OPEC OPEC is a permanent, intergovernmental Organization, Organization of the Petroleum Exporting Countries established in Baghdad, on September 10–14, 1960, Helferstorferstraße 17 by IR Iran, Iraq, Kuwait, Saudi Arabia and Venezuela. Its objective — to coordinate and unify petroleum policies 1010 Vienna among its Member Countries, in order to secure a steady Austria income to the producing countries; an efficient, economic Telephone: +43 1 211 12/0 OPEC bulletin OPEC and regular supply of petroleum to consuming nations; and Telefax: +43 1 216 4320 a fair return on capital to those investing in the petroleum Contact: Editor-in-Chief, OPEC Bulletin industry. Today, the Organization comprises 15 Members: Fax: +43 1 211 12/5081 Qatar joined in 1961; Libya (1962); United Arab Emirates E-mail: [email protected] (Abu Dhabi, 1967); Algeria (1969); Nigeria (1971); Angola Cover Website: www.opec.org (2007); Equatorial Guinea (2017). Ecuador joined OPEC in This month’s cover depicts the 2nd Anniversary 1973, suspended its Membership in 1992, and rejoined in of the ‘Declaration of Cooperation’ (see story 2007. Indonesia joined in 1962, suspended its Membership Website: www.opec.org on p4). on December 31, 2008, reactivated it on January 1, 2016, Visit the OPEC website for the latest news and infor- but suspended its Membership again on December 31, mation about the Organization, and for back issues 2016. Gabon joined in 1975 and left in 1995; it reactivated of the OPEC Bulletin, which are available free of its Membership on July 1, 2016. The Republic of the Congo Vol XLIX, No 10, December 2018, ISSN 0474–6279 charge in PDF format. joined the Organization on June 22, 2018. 54 Shutterstock European Commission European 44 56 Newsline 52 Equatorial Guinea attracts $2.4bn energy investment Gabon launches new licensing campaign Qatar makes new appointments to key cabinet posts 53 Saudi Aramco, SABIC select Yanbu as site for new industrial complex UAE’s ADNOC aims to grow oil output to 4m b/d by 2020 Obituary 54 Dr Alí Rodríguez Araque, former OPEC Secretary General, dies OPEC Cities in Focus 56 Kuwait City: witness to history and determination OPEC Fund News 66 Art and the importance of peace and stability Briefings 70 Visits to the Secretariat Noticeboard 74 Market Review 75 OPEC Publications 81 Secretariat officials Contributions Editorial staff Secretary General The OPEC Bulletin welcomes original contributions on Editor-in-Chief Mohammad Sanusi Barkindo the technical, financial and environmental aspects of Hasan Hafidh Director, Research Division all stages of the energy industry, as well as research Editor Scott Laury Dr Ayed S Al-Qahtani reports and project descriptions with supporting il- Head, Data Services Department Associate Editors lustrations and photographs. James Griffin, Maureen MacNeill, Mathew Quinn Dr Adedapo Odulaja Contributors printed according to the Austrian Ecolabel Head, PR & Information Department Editorial policy Ayman Almusallam criteria for printed matter (UZ 24), Hasan Hafidh The OPEC Bulletin is published by the OPEC Production Grasl Druck & Neue Medien GmbH, UW-Nr. 715 Head, Finance & Human Resources Department Diana Lavnick Secretariat (Public Relations and Information printed according to the Jose Luis Mora Design and layout Department). The contents do not necessarily reflect Austrian Ecolabel criteria Head, Administration & IT Services Department Carola Bayer, Tara Starnegg for printed matter (UZ 24), the official views of OPEC or its Member Countries. Photographs (unless otherwise credited) Abdullah Alakhawand UW-No 715 Head, Energy Studies Department Names and boundaries on any maps should not be Herwig Steiner, Wolfgang Hammer Dr Abderrezak Benyoucef regarded as authoritative.