‘They stressed that this plan could be adjusted or halted if needed’, Rystad Energy Senior Analyst Svetlana Tretyakova said.
In an online meeting on August 1, leading OPEC+ ministers decided to uphold their current oil output policy, including the gradual reversal of some production cuts starting in October, a Rystad Energy oil macro update from Senior Analyst Svetlana Tretyakova stated.
“They stressed that this plan could be adjusted or halted if needed,” Tretyakova added in the update, which was sent to Rigzone by the Rystad team.
In a separate report sent to Rigzone on Monday, Bjarne Schieldrop, the Chief Commodities Analyst at Skandinaviska Enskilda Banken AB (SEB), highlighted that OPEC+’s Joint Ministerial Monitoring Committee “didn’t make any new recommendations following their August 1 meeting”.
“Thus the planned production increase of 2.2 million barrels per day gradually from Q4-24 to Q3-25 still stands,” he added.
“But so do all the buts and ifs attached to that plan – i.e. if market conditions won’t allow it then this increase won’t happen,” he went on to state.
A statement posted on OPEC’s website on August 1 said the Joint Ministerial Monitoring Committee “reviewed the crude oil production data for the months of May and June 2024 and noted the high overall conformity for participating OPEC and non-OPEC countries of the Declaration of Cooperation (DoC)”.
“The committee noted the Republic of Iraq, the Republic of Kazakhstan, and the Russian Federation assurance during the meeting to achieve full conformity and welcomed the recent submission of their compensation plans for the overproduced volumes since Jan 2024 to the OPEC Secretariat,” it added.
“During today’s meeting, the member countries that participated in the June 2, 2024, meeting in Riyadh along with Oman, reiterated that the gradual phase-out of the voluntary reduction of oil production could be paused or reversed, depending on prevailing market conditions,” it continued.
“These countries had announced the extension of the voluntary reduction of oil production by 2.2 million barrels per day until the end of September 2024 and outlined plans for this reduction to be gradually phased out on a monthly basis until the end of September 2025,” it went on to state.
The OPEC statement noted that the committee will continue to monitor the conformity of the production adjustments decided at the 37th OPEC and Non-OPEC Ministerial Meeting held on June 2, 2024, including the additional voluntary production adjustments announced by some participating OPEC and non-OPEC countries, and will continue to closely assess market conditions.
The JMMC retains the authority to convene additional meetings or to request an OPEC and non-OPEC Ministerial Meeting, as outlined during the 37th OPEC and non-OPEC ministerial meeting held June 2, the statement said.
The next meeting of the JMMC is scheduled for October 2, the statement revealed. The next OPEC and non-OPEC Ministerial Meeting is scheduled to be held on December 1, according to a statement posted on OPEC’s site on June 2.
In a market analysis sent to Rigzone on August 1, Hani Abuagla, a Senior Market Analyst at XTB MENA, said, “if OPEC+ continues to focus on increasing production and data from China do not show recovery, oil prices may permanently fall to around $70-80 per barrel”.
“However, in the coming weeks, we can expect increased volatility and prices to remain around $80 per barrel,” he added.
A statement posted OPEC’s site on July 24 noted that the OPEC Secretariat received compensation plans from Iraq, Kazakhstan, and the Russian Federation for their overproduced volumes for the first six months of this year.
“The 37th OPEC and non-OPEC Ministerial Meeting held June 2, 2024, reiterated the critical importance of adhering to full conformity and the compensation mechanism,” that statement noted.
“In light of the above, the OPEC Secretariat received compensation plans from Iraq, Kazakhstan, and the Russian Federation for their overproduced volumes for the first six months of 2024 (January through June), which totaled about 1,184 million barrels per day for Iraq, 620,000 barrels per day for Kazakhstan, and 480,000 barrels per day for the Russian Federation, according to assessments made by the independent sources approved in the Declaration of Cooperation,” it added.