With Arab Gulf countries vowing not to cut oil production and non-OPEC countries forging ahead with production plans, the price of oil is continuing to fall.
Jordan’s Minister for Energy and Mineral Resource Mohammad Hamed, spoke to Al Jazeera’s Erica Wood about how Jordan was benefiting from the falling prices, and who was responsible for the plummet.
Al Jazeera: OPEC has decided not to reduce its output, saying it will help to give the market time to stabilise, do you agree with their decision?
Mohammad Hamed: I think so. I agree as it is the right course of action to take, at this time, is to wait and see. There is a lot of surplus in the market, which makes the supply much, much greater than the demand. So I think the approach by OPEC is a very wise one.
Al Jazeera: The Saudi minister is being very outspoken about this but where do you think the blame lies, why do you think we have an oversupply in the market?
Hamed: Well, I think countries that are outside OPEC with huge amount of supply now, have created this dilemma. Mind you, there are a lot of countries who are benefiting from this reduction in the oil prices, particularly Jordan, in the short term, not the long term.
Al Jazeera: How are you benefiting?
Hamed: We are benefiting from lower oil prices, lower oil products. Let me just say that we produce electricity from diesel oil and fuel oil, and not Egyptian gas, because we don’t have Egyptian gas and therefore we saved, I think, for the last four months, 45 million [Jordanian] dinars [$63m] over the past 4 months, which is not bad.
Al Jazeera: The strategic plan involving the Iraq gas pipelines was discussed; can you elaborate further on that?
Hamed: One of the most important issues that we covered in this conference is the strategic projects for a number of Arab countries. We have a strategic project which is the Iraqi oil and gas pipelines, that come from Iraq through Jordan and can go all the way to Egypt, so Egypt can be the front door for Iraq to export its oil and gas and oil products.
It is very strategic for these three countries; not just three countries but also for African countries. Also, the electricity connections between Arab countries, I think this is another strategic project.
Hopefully, we will arrive at a situation where we see gas pipeline networks going though all these Arab countries to reduce the cost of producing electricity and provide very good fuel for industry.
Al Jazeera: So it is about getting organised, being cohesive among the Arab world?
Hamed: Yes, most of the Arab world is facing a major challenge and that is energy, and so that is cheap fuel. [About] 27 percent of the world’s proven reserves [of oil], is actually in the Middle East and we need cheap fuel to go around.