Opec+ ministers keep oil output policy steady

A MEETING of the top ministers of Opec+ has kept oil output policy unchanged and pressed some countries to boost compliance with output cuts, a decision that spurred international crude prices to their highest in five months at nearly US$90 a barrel.

A ministerial committee (the Joint Ministerial Monitoring Committee, or JMMC) of the Organization of the Petroleum Exporting Countries and allies led by Russia, known as Opec+, met online to review the market and members’ implementation of output cuts.

Oil has rallied this year, driven by tighter supply, attacks on Russian energy infrastructure and war in the Middle East. Brent crude rose to trade near US$90 on Wednesday (Apr 3), its highest since late October 2023, after the meeting ended.

Opec+ members, led by Saudi Arabia and Russia, last month agreed to extend voluntary output cuts of 2.2 million barrels per day (bpd) until the end of June to support the market.

In a statement following the meeting, Opec+ noted the “high conformity” of members with pledged oil output cuts, although it said some countries had promised to boost their adherence and report on progress.

The panel said it welcomed pledges from Iraq and Kazakhstan to achieve full conformity as well as compensate for overproduction, and Russia’s announcement that its cuts in the second quarter will be based on production rather than exports.

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“Participating countries with outstanding overproduced volumes for the months of January, February and March 2024 will submit their detailed compensation plans to the Opec Secretariat by Apr 30, 2024,” the statement said.

Data from S&P Commodity Insights, known as Platts, showed that the group overproduced by a net 275,000 bpd in January and by 175,000 bpd in February. Platts is one of the secondary sources used by Opec+ to assess its members’ production levels.

Iraq, Gabon and Kazakhstan were the main members that produced above their quotas for the two months, the survey said.

Iraq last month promised to lower exports to make up for pumping above its Opec target, a pledge that would cut shipments by 130,000 bpd from February.

When the voluntary curbs expire at the end of June, the total cuts by Opec+ are set to decline to 3.7 million bpd as agreed in earlier steps starting in 2022.

The JMMC brings together leading Opec+ countries including Saudi Arabia, Russia and the United Arab Emirates.

The panel scheduled its next meeting for Jun 1, the same day as the next full Opec+ meeting to decide policy. REUTERS