Deputy Prime Minister Alexander Novak co-chaired the 48th meeting of the OPEC+ Joint Ministerial Monitoring Committee.
The delegates at the meeting reaffirmed their commitment to the alliance’s decision of 5 October 2022 to limit oil production to 2 million barrels per day (as compared to the August 2022 level) through the end of 2023. They also urged all participating countries to fully match the terms of their agreement and adhere to the compensation mechanism. According to Alexander Novak, the implementation of the agreement by the participants in January-February 2023 is more than 100 percent in terms of the established quotas. The level of world oil reserves relative to the average five-year value has decreased and is minus 87 million barrels. However, these reserves have been increasing in the past few months and there is an oil surplus in the market.
The parties to the agreement accepted the voluntary oil production adjustment announced by several countries on 2 April 2023. Starting 1 May and through the end of the year, Saudi Arabia and Russia will reduce oil output by 500,000 barrels per day. The relevant cuts for Iraq are 211,000 barrels, the UAE 144,000 barrels, Kuwait 128,000 barrels, Kazakhstan 78,000 barrels, Algeria 48,000 barrels, Oman 40,000 barrels and Gabon 8,000 barrels per day. The overall reduction in oil output will total 1.66 million barrels per day. Russia’s production cut will be based on February 2023 secondary source estimates of average production.
“We are seeing many uncertainties – volatile demand, supply, and oil prices, and a reduction of investment in the oil industry. The banking crisis in Europe and the United States is seriously affecting the oil market. Importantly, the additional voluntary reduction has not been launched by OPEC+. As of today, nine of 23 OPEC+ countries have joined this initiative. Other countries may follow suit if they deem it necessary. The main goal is to make the market more stable and predictable,” Alexander Novak said.
The OPEC+ members agreed to hold the next meeting of the OPEC+ Joint Ministerial Monitoring Committee and the OPEC+ Ministerial Meeting on 4 June 2023.
