Oil importing countries could announce a plan to purchase crude as a measure to support demand as the market fights with historic oversupply, International Energy Agency Executive Director Fatih Birol told Al Arabiya on Thursday.
The coronavirus pandemic has caused an unprecedented drop in the use of oil worldwide, from driving cars to air flights and industrial usage. Meetings between the OPEC+ group are due later today, while the G20 energy minister will meet Friday to discuss the global oil market.
Oil importers “are going to contribute to the solution … by buying oil to put in their strategic reserves in order to give a lifeline to demand,” Birol said.
Thursday’s meeting, between members of the Organization of the Petroleum Exporting Countries (OPEC) and a group of allied producers known as OPEC+, is expected to find an agreement on a cut, but nobody expects them to approach the level required to balance oil markets in the short term.
“I hope there will be a sizeable reduction or cut in order to help the oil industry globally,” Birol said regarding the OPEC+ meeting.
The G20 meeting on Friday, however, will see input from important producers such as the US, and importers, such as China.
“Given the size of the challenge we are facing today it is also very important what will take place tomorrow in the G20 meeting … because I think we need many countries coming together, having a dialog and trying to find a solution to this problem. It is not just a problem for a few oil producing countries but a problem for the global economy,” Birol added.