The turbulences observed in 2014-2015 in the price of oil on world markets caused economic cataclisms not only for the countries engaged in the production and purchase of oil, but also for the entire world. The devaluation of the national currency, inflation and stagnation in economic relations showed that real threats in economics and new risks were at the door.
In this case, the OPEC+ model proposed by the Azerbaijani President to the OPEC countries created hope as the escape window. The main concept of this model proposed by President Ilham Aliyev in 2016 at the Davos Economic Forum is that a joint meeting should be held between the OPEC member countries and the countries, which extract oil, but are not represented in the organization; the cooperation with them should be deepened, and the extraction and export of energy resources, oil prices on world markets and other issues should be discussed in a united format.
It happened when the oil price dropped by 80% and reached 30 USD on world markets. The further processes showed that this alert and the "recipe" of the Azerbaijani President saved OPEC from collapse and the world oil market from the deep crisis.
Later, Azerbaijan continued its mission within the framework of the OPEC+ cooperation to keep the balance on the oil market and achieve the price stability.
Thus, in March of last year, the meeting of the Joint Monitoring Committee of the Ministers of the OPEC and Non-OPEC countries was held in Baku. Baku became the venue for balancing prices on the world oil market and discussing the steps in this direction, and thus, Azerbaijan made another contribution to the solution of the international-scale priorities.
Last week, Davos once again hosted the World Economic Forum. Within the framework of the Forum, the recalling of the Azerbaijani President’s OPEC+ model gives the reason to say that the world community and international organizations appreciate the historical initiative of our head of state and recall it with gratitude.
OPEC Secretary General Mohammad Barkindo especially highlighted this issue at the meeting with President Ilham Aliyev.
Mohammad Barkindo: Mr. President, if you remember, 5 years ago, at the World Economic Forum, you became the first world leader urging all the OPEC member countries and non-OPEC countries to come and work together. Nobody had even come up with such a proposal before. You are forward-looking, very determined. You used the global platform to urge us to come and work together, because as You have said, we all were in the same situation. Because we all produced the same oil and sold it on the same market. At that time, the prices dropped by more than 80% on the market.
President Ilham Aliyev: Yes, the oil price was around 30 USD.
Mohammad Barkindo: We witnessed the worst situation. Mr. President, as a result of your forward-looking leadership and calls, we started working. On December 10, 2016, we signed the cooperation declaration with 24 countries for 12 months.
President Ilham Aliyev: Absolutely true.
Mohamamd Barkindo: It happened for the first time in history. We did it as a result of Your leadership and Your vision. We will never forget it, Mr. President. This is very important for us, and as you have noted, over the past 5 years, we have closely worked with Azerbaijan, and Azerbaijan has remained committed to all the decisions adopted.
President Ilham Aliyev touched upon the significance of the cooperation in the OPEC+ format in his interview to the Russia-24 TV channel. The correspondent asked the President, “What kind of dynamics is expected in the oil prices taking into consideration the tension in the Middle East?” The President replied: “It is difficult to forecast something. I think that both producers and buyers are satisfied with the current level of the prices. When it comes to Azerbaijan, this year, the price of oil barrel is forecast at 50 USD in our budget. However, now, the price is quite high. Therefore, I consider that if there is no emergency situation, the price will be at 55-65 USD. Moreover, the OPEC+ format is very beneficial, and Azerbaijan actively participates in the work of this format. We reduce production in connection with our obligations, and today, non-OPEC countries also behave like OPEC members. For this reason, the OPEC+ is a quite successful multilateral cooperation format, and in our opinion, it has defined the fair oil prices now.”
Thus, Azerbaijan, that has achieved the successful diversification of the sale network on Europe’s energy market, at the same time, has become an important participant in the process of balancing oil prices on an international scale. It means Azerbaijan has demonstrated its political position along with obtaining economic revenues.