KUWAIT: Minister of Oil Mohammad Al-Fares extolled the successful meeting of OPEC+, affirming the importance of continuing cooperation to restore market balance. The positive developments of the last period contributed to a noticeable improvement in oil market situation that reflected on expectations to improve demands in light of the spread of coronavirus and distribution of vaccines, Al-Fares, who also doubles as Minister of Higher Education, said in a statement carried by the Ministry of Oil on Thursday. Based on this development, OPEC+ ministers agreed on moving forward with a gradual increase of output with 350,000 barrels per day (bpd) in May and June each, and 440,000 bpd in July, he noted.
Kuwait’s quota of this rise is 29,000 bpd in May and June each, and 38,000 bpd in July, he revealed. Saudi Arabia will gradually increase its output with 250,000 bpd in May, 350,000 in June and 400,000 in July, he said. The minister underlined the importance of abiding by the specific quotas stipulated in the deal. The next OPEC+ meeting will be held on April 28 to review the effect of the deal and market situation in the upcoming period, he pointed out.
The 15th meeting of OPEC and non-OPEC ministers took place via videoconference on Thursday, under the chairmanship of Prince Abdulaziz Bin Salman, Saudi Arabia’s Minister of Energy, and Co-Chair Alexander Novak, Deputy Prime Minister of the Russian Federation, and decided to raise output as of May. The meeting emphasized the ongoing positive contributions of the Declaration of Cooperation (DoC) in supporting a rebalancing of the global oil market, said a statement by the OPEC secretariat. These outcomes are 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 subsequent decisions, it added.
The ministers noted, with gratitude, the value of the prudent policy approach by Saudi Arabia of maintaining its additional voluntary adjustments of 1 mb/d in April 2021 for third month in a row. The meeting approved the adjustment of the production levels for May, June and July 2021, while continuing to adhere to the mechanism agreed upon in the 12th OPEC and non-OPEC ministerial meeting (December 2020) to hold monthly OPEC and non-OPEC ministerial meetings to assess market conditions and decide on production level adjustments for the following month, with every adjustment being no more than 0.5 mb/d, it noted.
The ministers reviewed the monthly report prepared by the Joint Technical Committee (JTC), including the crude oil production data for February. They recognized the improvements in the market supported by global vaccination programs and stimulus packages in key economies but noted that the volatility observed in recent weeks warrants a continued cautious and vigilant approach in monitoring market developments.
The meeting observed that in February, oil stocks in OECD countries fell for the seventh consecutive month, but still remained above the 2015-2019 average, it stated. The meeting welcomed the positive performance of participating countries. Overall conformity reached 115 per cent in February 2021, reinforcing the trend of aggregate high conformity by participating countries, it pointed out.
The ministers noted that since the April 2020 meeting, OPEC and non-OPEC Participating Countries in the DoC had contributed to adjusting downward global oil supply by 2.6 billion barrels of oil by the end of February 2021, which has accelerated the rebalancing of the oil market. The ministers expressed their thanks to those countries that have submitted plans for previous compensation shortfalls and continue to work towards compensating for overproduced volumes, it said.
They urged all participants to achieve full conformity to reach the objective of market rebalancing and avoid undue delay in the process. In this regard, the ministers agreed to the request by several countries that have not yet completed their compensation for an extension of the compensation period until the end of September 2021.
The ministers agreed that participating countries with outstanding overproduced volumes will submit their plans for implementation of any required compensation for overproduced volumes to the OPEC Secretariat by April 15, 2021. The meeting commended Saudi Arabia for its recently announced “Saudi Green Initiative” and “Middle East Green Initiative” as important contributions to global efforts to combat climate change, and welcomed Saudi Arabia’s commitment to transfer knowledge and share experiences as art of these initiatives, it elaborated.
The oil and gas industry can be part of the solution to climate change. OPEC possesses critical resources and expertise that can help meet the challenge of reducing global greenhouse gas emissions. The group will explore ways to enhance collaboration in this important area.
G20 Leaders have already endorsed the strategy advanced by Saudi Arabia to deal with climate change – the Circular Carbon Economy and its 4Rs – reduce, reuse, recycle, and remove – as an inclusive and balanced solution for dealing with greenhouse gas emissions. The ministers thanked the JTC and the OPEC Secretariat for their contributions to the meeting. The next meetings of the Joint Ministerial Monitoring Committee (JMMC) and OPEC and non-OPEC Ministers are scheduled for April 28, 2021, it said. – KUNA