Ministerial Monitoring Committee of OPEC+ Confirms Implementation of Oil Production Reduction Agreements
The Meeting
The Ministerial Monitoring Committee of the OPEC+ organization confirmed at its meeting today, Friday, the implementation of the agreements to reduce oil production until the end of 2024, which were reached at the meeting on June 4.
Adherence to Agreements
The organization said in a statement that data on oil production in May and June showed that member states of the Organization of the Petroleum Exporting Countries (OPEC) and producers outside of it generally adhered to their agreement to cut oil production.
Appreciation and Support
“The Monitoring Committee expressed its full appreciation and support for the efforts of the Kingdom of Saudi Arabia to voluntarily reduce oil production by one million barrels per day in order to stabilize the market. In addition, the Committee expressed gratitude to Russia for the decision to reduce oil exports by 300,000 barrels per day in September,” the message says.
Continued Assessment
The Committee stated that it would continue to carefully assess market conditions, noting the willingness of the member states participating in the declaration of cooperation to resist market changes, as well as their willingness to take additional measures at any time based on consensus and solidarity between OPEC member states and participating countries from the outside.
Change in Meetings
The Committee noted the change to the periodic meetings of the Joint Ministerial Committee on Production Control to be held every two months, with the committee given the right to hold additional meetings.
Next Meeting
The next meeting of the ministerial committee is scheduled for 4 October.
Expectations
Five OPEC+ sources told Reuters it is unlikely that the bloc’s ministerial committee at its meeting today, Friday, will amend current production policy after Saudi Arabia’s decision to extend voluntary output cuts until September helped push up oil prices next.
Possible Additional Meeting
The Joint Ministerial Monitoring Committee may, if necessary, convene a meeting of all members of the OPEC+ coalition, which includes the Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia.
Oil Prices
Oil prices rose more than 14% in July from June, the biggest monthly increase since last January, when tight supply and increased demand for oil outweighed concerns about the impact of rising interest rates and inflation on economic growth.
Meeting Expectations
One source said Friday’s meeting would be “very short.” The remaining four sources said they did not expect the meeting to make any recommendations for changing manufacturing policy. All five sources spoke on condition of anonymity.
Saudi Arabia’s Voluntary Cut
Saudi Arabia said on Thursday it would extend a voluntary cut in oil production by one million barrels a day by another month until September, adding that the cut could be extended beyond that date or increased. Oil prices traded today, Friday, at almost $86 a barrel, hovering near their highest level since mid-April.
Russia’s Decision
Russian Deputy Prime Minister Alexander Novak said shortly after Saudi Arabia announced that Russia would also cut oil exports by 300,000 barrels a day in September.
Algeria’s Decision
An informed source told Reuters that Algeria, an OPEC member that announced an additional 20,000 bpd voluntary production cut in August, has not yet decided whether to extend the cut until September.
Agreement to Limit Supplies
OPEC+ reached an agreement to limit supplies until 2024 at its last meeting in June, while Saudi Arabia pledged to voluntarily cut production in July and extend it until August.
Output Cut
The coalition’s output cut, excluding additional voluntary cuts from three producers, is 3.66 million barrels per day, or roughly 3.6% of global demand.
