OPEC+ has adjusted upwards their overall production by 0.4 mb/d on a monthly basis starting August 2021 until phasing out the 5.8 mb/d production adjustment, and in December 2021 assess market developments and Participating Countries’ performance.
The decision was arrived at the 19th OPEC and non-OPEC Ministerial Meeting held on Sunday and which also reaffirm the Framework of the Declaration of Cooperation, signed on 10 December 2016 and further endorsed in subsequent meetings, including on 12 April 2020.
It also extended the decision of the 10th OPEC and non-OPEC Ministerial Meeting (April 2020) until the 31st of December 2022 .
The meeting stated that it will continue to adhere to the mechanism to hold monthly OPEC and non-OPEC Ministerial Meetings for the entire duration of the Declaration of Cooperation, to assess market conditions and decide on production level adjustments for the following month, endeavoring to end production adjustments by the end of September 2022, subject to market conditions.
“Adjust, effective 1st of May 2022, the baseline for the calculations of the production adjustments according to the attached table (table 1).
The organization also reiterate the critical importance of adhering to full conformity and taking advantage of the extension of the compensation period until the end of September 2021. Compensation plans should be submitted in accordance with the statement of the 15th OPEC and non-OPEC Ministerial Meeting.
The Meeting noted the ongoing strengthening of market fundamentals, with oil demand showing clear signs of improvement and OECD stocks falling, as the economic recovery continued in most parts of the world with the help of accelerating vaccination programmes.
It has however welcomed the positive performance of Participating Countries in the Declaration of Cooperation (DoC). Overall conformity to the production adjustments was 113% in June (including Mexico), reinforcing the trend of high conformity by Participating Countries.
OPEC and allied nations agreed to eventually raise the production limits imposed on five countries, ending an earlier dispute sparked by the United Arab Emirates that roiled global energy prices.
The disagreement, sparked by a demand by the UAE to increase its own production, temporarily upended an earlier meeting of the cartel. In a statement Sunday, the cartel announced that Iraq, Kuwait, Russia, Saudi Arabia and the UAE would see their limits rise.
“What bonds us together is way beyond what you imagine,” Saudi Energy Minister Prince Abdulaziz bin Salman said. “We differ here and there but we bond.”
Prince Abdulaziz declined to elaborate on how they came to that consensus, saying it would see the cartel “lose our advantage of being mysterious and clever.” But he clearly bristled at earlier reports on the dispute between Saudi Arabia, long the heavyweight of the Vienna-based cartel, and the UAE.
Prince Abdulaziz deferred at the beginning of a news conference afterward to al-Mazrouei in a sign of respect.
“The UAE is committed to this group and will always work with it and within this group to do our best to achieve the market balance and help everyone,” al-Mazrouei said. He praised the deal as a “full agreement” among all the parties.
Outside of OPEC, however, tensions still remain between the neighboring nations. The UAE largely has withdrawn from the Saudi-led war in Yemen, while also diplomatically recognizing Israel. Saudi Arabia also has opened its doors to Qatar again after a yearslong boycott, though relations remain icy between Abu Dhabi and Doha. Saudi Arabia also has aggressively sought international business headquarters — something that could affect the UAE’s business hub Dubai
The meeting decided to hold the 20th OPEC and non-OPEC Ministerial Meeting on 1 September 2021.