Azerbaijan’s State Oil Company SOCAR is not highly dependent on international crude oil prices, since the bulk of the oil produced directly by SOCAR is refined and sold domestically at an internal tariff, Ibrahim Ahmadov, Deputy Head of the public relations and events department at SOCAR, told Trend.

“I expected that the countries cooperating in the format of OPEC+ would return to the negotiating table sooner or later, since a strong decline in oil prices in the long run does not reflect the interests of these countries, whose economy is largely associated with oil revenues. It was not clear how soon this would happen,” said Ahmadov.

He added that two scenarios shown up in this case.

“In the first scenario, the leading producers of conventional oil could continue to increase production for several more months, or to maximally weaken the market position of the shale oil until the end of 2020 as much as possible. The second scenario could accelerate the start of negotiations, which implied a wider format of cooperation. When I suggested a few weeks ago that OPEC+ could hope for other countries to join the process of regulating oil production and oil prices, this hypothesis was hard to believe,” he said.

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“However, as we see, in the context of the aggravating economic crisis amid the pandemic, the US actively joined the diplomatic process, which prompted OPEC+ to resume negotiations now,” Ahmadov noted.

Now experts are discussing a scenario, in which, countries that still not participating in the OPEC+ format could also contribute to the total reduction in world oil production in order to jointly regulate prices, he stressed.

“The reduction in production by 10-15 million barrels per day is probably implied not only by Saudi Arabia and Russia, but also by connecting other major oil producing countries to quotas. So, those producing companies whose existence has been in question due to the current level of oil prices, may possibly continue operation by joining the international cooperation in one or another format,” Ahmadov added.

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He stressed that SOCAR’s position is to support all the undertakings of the Azerbaijani government aimed at stabilizing and growing the country’s economy.

“As a rule, short-term swings in the international market do not affect the stability of the country’s economy, and there is reason to believe that the current situation in the markets can change for the better either in the short or medium term,” Ahmadov concluded.