Oman oil minister Mohammad bin Hamad al-Rumhy sharply criticised OPEC’s production policy on Wednesday, saying it was creating volatility in the market without benefiting oil producers and that his country was suffering. In November, OPEC decided to keep its output unchanged despite sliding prices.
Analysts believe the policy is being engineered by Saudi Arabia and other top Gulf producers to protect their market share against higher-cost suppliers outside OPEC, such as U.S. shale oil producers. Oman is a significant oil producer but it lacks the huge oil and financial reserves of its Gulf neighbours, and it is not an OPEC member.
“I fail to understand how market share can be more important than revenue,” Rumhy said at an energy industry conference in Kuwait, in Oman’s most direct public criticism of OPEC so far. He said OPEC’s policy might temporarily force high-cost producers out of the market but they would eventually come back, so OPEC was just causing volatility in the market.
Because of the oil price slide, Oman earlier this month announced a 2015 state budget that swung deep into deficit, projecting a shortfall of 2.5 billion rials ($6.5 billion). “The current situation is bad for us in Oman. This is a really difficult time. This is bad politics,” Rumhy said.