OPEC and Non-OPEC oil production cuts break another record

OPEC and Non-OPEC countries participating in voluntary production cuts had another record-breaking month of conformity levels with production adjustments during March 2018.

The OPEC-Non-OPEC Joint Ministerial Monitoring Committee (JMMC) said on Friday, April 20, that the conformity level for March was 149%, the highest so far. This was based on the report of the Joint OPEC-Non-OPEC Technical Committee (JTC).

The JMMC convened for the eighth time, with this meeting’s venue being Jeddah, Saudi Arabia.

The Committee was established following OPEC’s 171st Ministerial Conference Decision on November 30, 2016, and the subsequent Declaration of Cooperation made at the joint OPEC-Non-OPEC Producing Countries’ Ministerial Meeting held on December 10, 2016.

At the time 11, now 10, non-OPEC oil producing countries cooperated with the 13, now 14, OPEC member countries to accelerate the stabilization of the global oil market through voluntary adjustments in total production of around 1.8 million barrels per day.

The resulting declaration, which came into effect on January 1, 2017, was for six months. The second joint OPEC-Non-OPEC Producing Countries’ Ministerial Meeting, held on May 25, 2017, decided to extend the voluntary production adjustments for another nine months commencing July 1, 2017.

At the third joint OPEC-Non-OPEC Producing Countries’ Ministerial Meeting, held on November 30, 2017, it was agreed to amend the Declaration of Cooperation so that it will take effect for the entirety of 2018.

The JMMC added that OECD (Organisation for Economic Co-operation and Development) commercial stock levels were adjusted from a peak of 3.12 billion barrels in July 2016 to 2.83 billion barrels in March 2018, corresponding to a drop of 300 million barrels.

But the Committee also noted that the current commercial stocks remained above levels seen before the market downturn.

The JMMC urged all participating countries to remain focused on and, where necessary, intensify their efforts on the basis of the core principles of transparency, fairness and equity, which are central to the “Declaration of Cooperation.”

The Committee received assuring statements by Iraq, Kazakhstan, Libya, and Venezuela with Iraq and Kazakhstan’s stating they would further improve their conformity levels.

The next JMMC Meeting is scheduled to be held on June 21, 2018, at the OPEC Secretariat in Vienna, Austria.