QUITO – Ecuadorian President Rafael Correa said Friday it was “very unlikely” that OPEC would accept his recommendation that the cartel cut production by 1.6 percent to stabilize global crude prices.
Even so, the head of state said in a meeting with the media that Ecuador, one of the smallest members of the Organization of the Petroleum Exporting Countries, was prepared for persistently low oil prices.
“We’re prepared for the worst-case scenario. Next year’s budget was drawn up based on a price of $35 per barrel,” Correa said in explaining the output-cut proposal he presented at the recently concluded Summit of South American-Arab Countries, or ASPA, which was held Nov. 10-11 in Riyadh.
He said his proposal for a cut of less than 2 million barrels a day would lead to a “strong recovery in prices,” just as a “small excess of supply has caused prices to plunge by half.”
The president said it was not necessary for non-OPEC countries such as Russia to contribute to the production cut for the measure to have the necessary impact.
Correa said Ecuador’s proposal was the correct one from a technical standpoint and had the support of many countries, though not the “largest OPEC producers.”
The president said the sharp drop in oil prices would cause Ecuador’s crude export revenues to decline by $7 billion in 2015, an amount equivalent to 7 percent of the nation’s gross domestic product (GDP).