A MEETING of top Opec+ ministers has kept oil output policy unchanged including a plan to start unwinding one layer of output cuts from October, and repeated that the hike could be paused or reversed if needed.
Top ministers from the Organization of the Petroleum Exporting Countries and allies led by Russia, or Opec+ as the group is known, held an online joint ministerial monitoring committee meeting (JMMC) on Thursday (Aug 1).
Opec+’s policy as agreed in June calls for some members to gradually phase out cuts of 2.2 million barrels per day from October 2024 to September 2025. The group also agreed to extend earlier cuts of 3.66 million bpd until end-2025.
In a statement on Thursday, Opec+ said the members making the 2.2 million bpd of voluntary cuts “reiterated that the gradual phase-out of the voluntary reduction of oil production could be paused or reversed,” depending on market conditions.
Oil prices have fallen from a 2024 high above US$92 a barrel in April to below US$82, pressured by concern about the strength of demand but finding support this week from increasing tensions in the Middle East.
Russian Deputy Prime Minister Alexander Novak said on Thursday the current level of oil prices was comfortable for Russia, its budget, and other participants in the market. Supply and demand remained in balance, he added.
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Algeria’s Energy Minister Mohamed Arkab said uncertainties affecting oil markets were unlikely to continue for much longer, as long as the market remains adequately supplied.
Oil demand, he added, was expected to follow a sustained upward trend in the coming weeks.
In June, Saudi Arabian Energy Minister Prince Abdulaziz bin Salman had said Opec+ could pause or reverse the production hikes if it decided the market is not strong enough.
Thursday’s meeting also noted assurances from Iraq, Kazakhstan and Russia made during the meeting to achieve full conformity with pledged output cuts, the statement said. Those countries had earlier delivered plans to compensate for past overproduction.
An Opec+ source said the chair of the meeting was insisting that members show commitment to the compensation plan.
The JMMC, which groups the oil ministers of Saudi Arabia, Russia and other leading producers, usually meets every two months and can make recommendations to the wider Opec+ group.
The JMMC will hold its next meeting on Oct 2. REUTERS
