OPEC countries and the other countries which export crude oil (OPEC+) have agreed, at the 11th OPEC and non-OPEC Ministerial Meeting, to extend record oil production cuts until the end of July.
The Meeting reaffirmed the continued commitment of the participating producing countries in the ‘Declaration of Cooperation’ (DoC) to a stable market, the mutual interest of producing nations, the efficient, economic and secure supply to consumers, and a fair return on invested capital.
The Meeting welcomed Ecuador, Indonesia, Trinidad & Tobago as observers.
The Meeting recalled the decision taken by all Participating Countries in the DoC at the 10th (Extraordinary) OPEC and non-OPEC Ministerial Meeting on 12 April 2020 to adjust downwards overall crude oil production.
The Meeting noted additional adjustments from Saudi Arabia (1 mb/d); the UAE (100 tb/d); Kuwait (80 tb/d) and Oman (10-15 tb/d) in June; the announcements of voluntary adjustments from several countries, such as Norway and Canada; as well as various oil company statements revising downward production plans and shutting in supply.
The Meeting underscored how the production adjustments in May, alongside the emergence of many economies from the lockdowns due to the COVID-19 pandemic, have helped garner tentative signs of a recovery in the global economy and oil market.
However, the Meeting emphasized that it was vital that DoC Participants, and all major producers, remain fully committed to efforts aimed at balancing and stabilizing the market. In this regard, it was noted that global oil demand was still expected to contract by around 9 mb/d for the whole of 2020.
In view of the current fundamentals, and following the agreement reached at the 179th Meeting of the OPEC Conference, all Participating Countries:
- Reconfirmed the existing arrangements under the April agreement.
- Subscribed to the concept of compensation by those countries who were unable to reach full conformity (100 per cent) in May and June, with a willingness to accommodate it in July, August and September, in addition to their already agreed production adjustment for such months.
- Agreed the option of extending the first phase of the production adjustments pertaining in May and June by one further month.
- Recognized that the continuity of the current agreement is contingent on them fulfilling elements 1 and 2 above.
- Agreed without dissent that the full and timely implementation of the agreement remains inviolable, based on the five key elements, and endorsed the ‘Statement on the Declaration of Cooperation,’ which is annexed to this Press Release.
The Meeting also called upon all major oil producers to proportionally contribute to the stabilization of the oil market, taking into consideration the substantial effort made by the OPEC and non-OPEC Participating Countries of the DoC.
In order to observe the fair, timely and equitable implementation of the above, the Joint Ministerial Monitoring Committee (JMMC) was requested to closely review the general energy market conditions and related factors, oil production levels, and conformity levels with the DoC, assisted by the Joint Technical Committee (JTC) and the OPEC Secretariat. The JMMC is to meet monthly until December 2020 for this purpose, with the next JMMC set for 18 June 2020.
The Meeting decided that an OPEC and non-OPEC Ministerial Meeting also will convene in Vienna, Austria, on 01 December 2020.