The cartel of oil exporting countries urges its members participating in the COP28 climate summit to oppose any agreement that goes against the fossil fuel sector.
Producers should “proactively reject any text or formula that directly points to fossil fuels as responsible instead of talking about emissions,” Secretary General Haitham Al Ghais said in the letter addressed to the 13 members of OPEC.
The COP28 climate talks in Dubai, which will conclude early next week, are unfolding with delegations straddling a clearly drawn battle line: whether or not they can commit to phasing out fossil fuels.
“It appears that undue and disproportionate pressure against fossil fuels may reach a tipping point with irreversible consequences, as the project contains options on the gradual elimination of fossil fuels,” Al Ghais said in the letter, reported by the Bloomberg agency. . “What we will continue to advocate for is the reduction of emissions, not the elimination of energy sources,” he added. “The world requires large investments in all energies, including hydrocarbons, all technologies and an understanding of the energy needs of all people. “Energy transitions must be fair, equitable and inclusive.”
The cartel’s nervousness is also justified because it is going through a delicate situation. Despite having chosen a week ago to cut production in order to sustain prices, prices are unable to stabilize.
On the contrary, the Brent variety is above $75 a barrel and is heading for a seventh weekly drop. West Texas Intermediate, which is close to $70 a barrel, has fallen 11% in the last six sessions. Crude oil has closed every day lower since last week’s cartel meeting. It is the worst downward streak since 2018.
The causes are that there are fears that the global economy is heading towards a soft landing and that this will end up affecting demand, at the same time that supply outside of OPEC continues to expand (the US already exceeds 13 million barrels daily). Likewise, discipline within the cartel is not very rigid and there is skepticism that all members are strictly complying with the reduction that corresponds to them.
