Market Rebalancing: OPEC+ Says It Withheld 2.3bn Barrels of Oil in Nine Months
… Thanks Sylva for His Role As Special Envoy
By Ikenna Omeje
The Organization of Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, withheld 2.3 billion barrels of oil between April 2020 and January 2021, in its commitment to accelerating the oil market rebalancing.
This was disclosed at the 14th Meeting of OPEC and non-OPEC Ministers, which took place via video conference on Thursday, under the Chairmanship of Saudi Arabia’s Minister of Energy, Prince Abdul Aziz bin Salman and Co-Chair, Deputy Prime Minister of the Russian Federation, Alexander Novak.
On April 12, 2020 at its Ministerial Meeting, OPEC+ took historic decisions to adjust downwards overall crude oil production and subsequent decisions, which have made positive contributions in supporting a rebalancing of the global oil market in line with the historic decisions.
According to a release on Thursday, “The Ministers approved a continuation of the production levels of March for the month of April, with the exception of Russia and Kazakhstan, which will be allowed to increase production by 130 and 20 thousand barrels per day respectively, due to continued seasonal consumption patterns.”
So far, overall conformity with the original decision was 103 per cent, reinforcing the trend of aggregate high compliance by participating countries.
“The Meeting recognized the recent improvement in the market sentiment by the acceptance and the rollout of vaccine programs and additional stimulus packages in key economies, but cautioned all participating countries to remain vigilant and flexible given the uncertain market conditions, and to remain on the course which had been voluntarily decided and which had hitherto reaped rewards,” the release stated.
OPEC+ also thanked Nigeria’s Minister of State for Petroleum Resources, Timipre Sylva, for his shuttle diplomacy as Special Envoy of the Joint Ministerial Monitoring Committee (JMMC). Sylvia was appointed last month as Special Envoy to Congo, Equatorial Guinea, Gabon and South Sudan to discuss matters pertaining to conformity levels with the voluntary production adjustments and compensation of over-produced volumes.
It granted the request by several countries, which have not yet completed their compensation, for an extension of the compensation period until end of July 2021and “urged all participants to achieve full conformity and make up for pervious compensation shortfalls, to reach the objective of market rebalancing and avoid undue delay in the process.”