(MENAFN- AFP) The shock decision by OPEC to maintain production levels despite plummeting oil prices was based purely on economic considerations and not directed at any particular country, the cartel's secretary-general Abdullah El-Badri said on Wednesday.
"It's not directed at the United States or tight oil. It's not directed to Russia ... It is a pure economic decision by our ministers and we supported it," El-Badri told a panel audience at the Davos ski resort.
Theories have run wild ever since OPEC ministers decided in November to stand pat on oil supply despite a fast sinking price that has fallen by over 50 percent since June.
The decision upended the whole oil industry and sent shock waves across the world economy. It especially punished countries hugely dependent on crude production, such as Russia, Venezuela and Nigeria.
El-Badri, who is also the Saudi oil minister, is the most influential player in the sector.
He said the economic fundamentals did not justify the plummeting price, but added that ministers ruled out cutting production because of the danger that non-OPEC producers would take advantage.
"If we cut (supply) we will have to cut again. Because this non-OPEC supply will keep producing. They will replace us," he said.
Moreover, El-Badri said the world economic outlook was uncertain, with a sluggish global economy still weighing down on prices.
"We know the price will come down maybe to 40 or lower. It's a problem for us to decide on how much we're going to cut," he said.
The plunge in the oil price is becoming an urgent problem for oil producers, especially those whose economies are wholly dependent on the sector.
The IMF on Wednesday warned that the price drop will cost the powerful energy exporters of the Gulf Cooperation Council around $300 billion, threatening to send many into budget deficits.
Of the major exporters of the GCC, the International Monetary Fund predicted in a new report that only Kuwait would maintain a budget surplus this year. Saudi Arabia, Bahrain, Oman, Qatar and the United Arab Emirates will sink into deficits.
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