Energy

OPEC Calls for ‘Full Conformity’ to Adjust Downwards Overall Crude Production, Compensate for Overproduced Volumes


The 23rd Meeting of the Joint Ministerial Monitoring Committee (JMMC) took place via videoconference on Monday, 19 October 2020, under the Chairmanship of HRH Prince Abdul Aziz Bin Salman, Saudi Arabia’s Minister of Energy, and Co-Chair Alexander Novak, Minister of Energy of the Russian Federation.

The Committee expressed its sincere condolences to the Government and people of Kuwait at the passing of His Highness Sheikh Sabah Al-Ahmad Al-Jaber Al-Sabah on 29 September 2020. The Emir was highly praised for his excellent leadership and astute diplomacy, both nationally and around the world. He was hailed as a loyal defender of OPEC and was considered, among those who knew him, as a man of great dignity, generosity and kindness.

The Committee reviewed the monthly report prepared by its Joint Technical Committee (JTC) and developments in the global oil market since its last meeting on 17 September 2020. The Committee also considered market prospects for 2021.

The Committee emphasised the ongoing positive contributions of the Declaration of Cooperation (DoC) in supporting a rebalancing of the global oil market in line with the historic decisions taken at the 10th (Extraordinary) OPEC and non-OPEC Ministerial Meeting on 12 April 2020 to adjust downwards overall crude oil production, and the unanimous decisions taken at the 179th Meeting of the OPEC Conference and the 11th OPEC and non-OPEC Ministerial Meeting on 6 June 2020.

The Committee reaffirmed the commitments of all participating countries to achieve full conformity and make up for any shortfalls under compensation plans presented to the Committee for an extended period through December 2020. In this manner, all participating countries were encouraged to increase their efforts to compensate for overproduced volumes in order to achieve the objective of market rebalancing and avoid undue delay in the process.

The Committee reviewed the crude oil production data for the month of September 2020 and welcomed the positive performance in the overall conformity level for participating OPEC and non-OPEC Countries, at 102 per cent, which is considered the highest since May 2020 (excluding the voluntary adjustments in June 2020 by Saudi Arabia, Kuwait and the UAE). Moreover, countries compensated in September 2020 a total of 249 tb/d to make up for previously overproduced volumes.

The Committee applauded those DoC members who provided additional voluntary contributions in the month of September 2020, including compensation volumes. It has reiterated its call for those countries that are still underperforming to swiftly implement their commitments, including their compensation plan. The JMMC underlined that underperformance is not only unfair to other performing countries, but it is also detrimental to oil market rebalancing.

The Committee observed that the economic recovery has slowed due to the resurgence of COVID-19 cases in major economies, particularly in the Americas, Asia and Europe.

The Committee reminded all participating countries of the necessity to be vigilant and proactive given the precarious market conditions and prospects.

The Committee thanked the JTC and the OPEC Secretariat for their contributions to the meeting. The next meetings of the JTC and the JMMC are scheduled for 16 November and 17 November 2020, respectively.

Source
wam
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