OPEC+, a group of OPEC nations and its non-OPEC allies led by Russia have said that in April 2018 its member countries achieved a conformity level of 152% to the oil output cuts agreed on in December 2016. They’ve also pledged to address concerns over potential oil supply shortages.
The Joint Ministerial Monitoring Committee (JMMC) responsible for keeping track of the conformity levels of OPEC+ on Friday said: “This demonstrates the commitment of participating countries to the restoration of market stability, which is intended to serve the long-term interests of producers, consumers and the global economy.”
To remind, in December 2016, 11 (now ten) non-OPEC oil-producing countries and OPEC’s 13 (now 14) Member Countries agreed to voluntary reduce by 1.8 million barrels per day with the aim to stabilize the global oil market, after oil touched a below $30 mark in early 2016. Earlier in May, prices reached an $80 mark, before dropping to around $75 levels.
Some reports, however, have claimed that the surplus oil inventories have been erased by these measures, raising concerns of within oil consuming countries there would be supply shortages which might threaten the global economic growth.
Production restrictions to be eased?
The JMMC acknowledged “the rising concerns expressed by some importing and consuming countries regarding potential shortages in the global oil market.”
It reaffirmed participating countries’ commitment to the stability of the market and energy security of the global economy, pledging to “to address consumer anxiety over the security of oil supplies”
In a tweet last week, Saudi oil minister Khalid al Falih said: “the current oil market anxiety is a reflection of the geopolitical situation and not a result of any oil supply shortage.”
Recently re-imposed U.S. sanctions on Iran targeting, among others, Iranian oil exports, helped spur the concerns. In a tweet on May 9. Al Falih said:
Following the US withdrawal from #IranDeal , I would like to confirm our commitment to oil market stability for the benefit of producers & consumers, #Saudi will work closely with major OPEC, non-OPEC producers & with key consumers to mitigate the effects of any supply shortages.
— خالد الفالح|Khalid Al Falih (@Khalid_AlFalih) May 9, 2018
Russian energy minister Alexander Novak last week said the oil output cuts might be eased starting the third quarter.
“We will discuss the need to ease the restrictions level. It can be said that it should start from the third quarter – this is the second half of the year,” the minister said at the St. Petersburg Economic Forum, Tass has reported.
The ninth Meeting of the OPEC/Non-OPEC JMMC will take place in Vienna on June 21, 2018.
Offshore Energy Today Staff