During the latest meeting of top OPEC+ ministers, the Organization of the Petroleum Exporting Countries and its allies decided to keep its oil output policy unchanged. The organization also restated its plans to start easing output cuts from October and repeated that it may pause or reverse its output cut hike.
OPEC+ is currently cutting output by 5.86 million barrels per day or about 5.7 percent of global demand. This cut has come in a series of steps that the members agreed on since 2022 to bolster the crude market amid uncertainty over global demand and rising supply outside the group.
Cuts to phase out by end-2025
In a statement after Thursday’s meeting, OPEC+ said the members making the most recent addition cuts (a 2.2 million barrel per day voluntary cut until September) reiterated that they may pause or reverse the gradual phase-out, depending on market conditions.
Oil prices have declined from a 2024 high above $92 a barrel in April to below $81 amid concerns about the strength of demand despite increasing tensions in the Middle East.
OPEC+ agreed at its last meeting in June to phase out the 2.2 million barrels per day cut over the course of a year from October 2024 until September 2025. During the June meeting, it also agreed to extend earlier cuts of 3.66 million barrels per day until the end of 2025.
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Overproduction compensation
The Joint Ministerial Monitoring Committee (JMMC) noted the high overall conformity of participating OPEC and non-OPEC countries of the Declaration of Cooperation (DoC). In addition, it noted assurances from Iraq, Kazakhstan and Russia to achieve full conformity with output cut pledges, the statement said. Moreover, it welcomed the recent submission of their compensation plans for the overproduced volumes since Jan 2024 to the OPEC Secretariat.
The next meeting of the JMMC will be on October 2, 2024.
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