OPEC reiterates commitment to oil cuts, vows compensation for overproduction

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Major oil-producing countries on Monday reaffirmed their commitment to achieving full compliance with production cuts in order to bring about stability in the market. — Courtesy photo
Major oil-producing countries on Monday reaffirmed their commitment to achieving full compliance with production cuts in order to bring about stability in the market. — Courtesy photo

VIENNA — Major oil-producing countries on Monday reaffirmed their commitment to achieving full compliance with production cuts in order to bring about stability in the market.

In a virtual meeting of OPEC Joint Ministerial Monitoring Committee that took place under the chairmanship of Saudi Energy Minister Abdulaziz Bin Salman, the ministers also vowed to make up for any shortfalls under compensation plans presented to the committee for an extended period through December 2020.

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.

Addressing the participants, the Saudi minister said the OPEC+ will do whatever is necessary to enhance stability in global oil markets.

“I cannot emphasize strongly enough how vital it is to show the strength of our resolve. Nobody in the global oil market should be in any doubt as to our commitment and our intent,” Prince Abdulaziz said.

Energy ministers expressed their sincere condolences to the government and people of Kuwait at the passing of Sheikh Sabah Al-Ahmad Al-Jaber Al-Sabah on Sept. 29, 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 ministers reviewed the monthly report prepared by its Joint Technical Committee (JTC) and developments in the global oil market since its last meeting on Sept. 17, 2020. The committee also considered market prospects for 2021.

Energy leaders emphasized 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 April 12, 2020, to adjust downward 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 June 6, 2020.

The ministers 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 percent, which is considered the highest since May 2020 (excluding the voluntary adjustments in June 2020 by Saudi Arabia, Kuwait, and the United Arab Emirates). Moreover, countries compensated in September 2020 a total of 249 tb/d to make up for previously overproduced volumes.

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

They reminded all participating countries of the necessity to be vigilant and proactive given the precarious market conditions and prospects. — WAM


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