OPEC, others agree to gradually increase oil production

The Organization of the Petroleum Exporting Countries and its allies announced on Thursday that they have reached an agreement that would see production gradually climb from May through July.

The group, known as OPEC+, commended the value of the prudent policy approach by Saudi Arabia of maintaining its additional voluntary adjustments of one million bpd in April 2021 for the third month in a row.

“The meeting approved the adjustment of the production levels for May, June and July 2021,” the group said in a statement at the end of the 15th Meeting of OPEC and non-OPEC Ministers held via videoconference.

The group said it would continue to adhere to the mechanism agreed upon in December to hold monthly OPEC and non-OPEC Ministerial Meetings to assess market conditions and decide on production level adjustments for the following month, with every adjustment being no more than 0.5 million bpd.

The ministers recognised the improvements in the market supported by global vaccination programmes and stimulus packages in key economies.

They, however, noted that the volatility observed in recent weeks warranted a continued cautious and vigilant approach in monitoring market developments.

The statement said, “The meeting welcomed the positive performance of participating countries. Overall conformity reached 115 per cent in February 2021, reinforcing the trend of aggregate high conformity by participating countries.

“The ministers noted that since the April 2020 meeting, OPEC and non-OPEC participating countries in the Declaration of Cooperation had contributed to adjusting downward global oil supply by 2.6 billion barrels of oil by the end of February 2021, which has accelerated the rebalancing of the oil market.”

The ministers expressed their thanks to those countries that had submitted plans for previous compensation shortfalls and continued to work towards compensating for overproduced volumes.

They urged all participants to achieve full conformity to reach the objective of market rebalancing and avoid undue delay in the process.

According to the statement, the ministers agreed to the request by several countries that have not yet completed their compensation for an extension of the compensation period until the end of September 2021.

The ministers agreed that participating countries with outstanding overproduced volumes would submit their plans for implementation of any required compensation for overproduced volumes to the OPEC Secretariat by April 15, 2021.