The Organisation of Petroleum Exporting Countries (OPEC) and its allies yesterday resolved to stick to plans for a phased easing of oil production restrictions from May to July.
The cartel, along with its partners known as OPEC+ also ditched plans to hold a ministerial meeting today since the group decided to adhere to policies broadly agreed at a previous April 1 meeting of OPEC+.
Speaking after a meeting yesterday, Russian Deputy Prime Minister, Mr. Alexander Novak, who co-chaired the occasion, stated that the next OPEC+ ministerial meeting will hold June 1 to review output levels for July and August.
OPEC+, which is responsible for more than a third of global production has cut output by around eight million barrels per day (bpd), equivalent to over 8 per cent of global demand, including a one million bpd voluntary cut by Saudi Arabia.
The group had resolved in April to bring 2.1 million bpd back to the market from May to July, easing cuts to 5.8 million bpd.
It expressed fears that even though more than one billion COVID-19 vaccine doses had been administered globally, it was concerned that surges in new virus cases in India, Brazil and Japan might derail recovering demand for crude.
In a statement after the meeting, OPEC highlighted the continuing recovery in the global economy, supported by unprecedented levels of monetary and fiscal support, while noting that the recovery is expected to pick up speed in the second half of the year.
It reviewed the monthly report prepared by the Joint Ministerial Monitoring Committee (JMMC), including the crude oil production data for March 2021, and put the overall conformity to the production adjustments at 115 per cent in March 2021, reinforcing the trend of high conformity by the participating countries.
OPEC stated that participating countries performed beyond expectations in March 2021, with total overconformed volumes of 1.23 mb/d, but regretted that some countries had yet to achieve the minimum expectation of 100 per cent conformity and to compensate for overproduced volumes.
The meeting added that participating countries pledged to achieve full conformity and make up for previous adjustment shortfalls during the extended compensation period, which runs through the end of September 2021.
"Under the referred circumstances, the ministerial meeting decided on the continued implementation of the production adjustment decision of the 15th OPEC and non-OPEC ministerial meeting in the months of June and July.
"It was decided that the 30th JMMC meeting and the 17th OPEC and the non-OPEC ministerial meeting will take place on June 1, 2021," it said.