KUWAIT: The second phase of the OPEC+ deal, which will further decrease oil output, will initiate in August, a Kuwaiti official said yesterday. Governor of the State of Kuwait at OPEC Haitham Al-Ghais indicated that there was an understanding among members of OPEC+, which includes members from the international oil organization and non-members, with regards to recommendations coming of the Wednesday meeting for the Joint Ministerial Monitoring Committee (JMMC).

The video-conference, seeing the participation of Kuwait's Minister of Oil and Acting Minister of Water and Electricity Dr Khaled Al-Fadhel, focused on commitment to the OPEC+ deal last June, Ghais said, adding that the participants were pleased with commitment which rose from 87 percent in May to 107 percent last month. He added that the JMMC stressed that the commitment to the OPEC+ deal in the upcoming months will be crucial due to the lingering impact of the coronavirus (COVID-19) on the global oil market.

Despite improvements in the market due to the policies of returning back to normalcy in various parts of the world, challenges still remain in the months ahead, the official pointed out. Bringing down the production from 9.7 to 7.7 barrels per day (bpd) does not necessarily mean that the return of two million barrels to global supplies, noted Ghais, explaining that countries, which did not abide by the OPEC+ deal in May and June, had tendered clear plans to catch up with their quotas in production cuts. He added that the upcoming period will hopefully see more stability in the market, revealing that there was a significant improvement connected with oil demand in the second half of the year compared with the first.

Ghais indicated that demand for the second and third quarters will see an increase from 82 to 92 million bpd. The upcoming meeting with the JMMC will be held on August 18 and it will review the commitment to OPEC+ in July, said the Kuwaiti official. OPEC members and countries from outside the organization agreed on April 13 to decrease production by 9.7 million bpd starting from May until July 31.OPEC+ also agreed to decrease production until December 31 by 7.7 million bpd with an expected 5.5 million bpd production output cuts from January 1, 2021 to April 30, 2022. - KUNA