The Joint Ministerial Monitoring Committee (JMMC), of the Organisation of Petroleum Exporting Countries (OPEC) and its allies OPEC+, has urged member countries to fully comply with the oil production cut agreement as full commitment to conformity remains key to achieving market rebalancing.
The 19th Joint Ministerial Monitoring Committee (JMMC) was held via videoconference, on 18 June 2020, under the Chairmanship of HRH Prince Abdul Aziz Bin Salman, Saudi Arabia’s Minister of Energy, and co-Chair HE Alexander Novak, Minister of Energy of the Russian Federation.
The Committee reviewed the monthly report prepared by the Joint Technical Committee (JTC) and recent developments in the global oil market, as well as immediate prospects for the remainder of 2020 and into 2021.
The JMMC reiterated the critical role that the ‘Declaration of Cooperation’ (DoC) continues to play in supporting oil market stability and economic recovery, in the face of the COVID- 19 pandemic shock and the subsequent severe global economic downturn. In this regard, it recalled the historic decision taken by all Participating Countries in the DoC at the 10th (Extraordinary) OPEC and non-OPEC Ministerial Meeting on 12 April 2020 to adjust downwards overall crude oil production, and the decisions taken at the recent 179th Meeting of the OPEC Conference and the 11th OPEC and non-OPEC Ministerial Meeting on 6 June 2020. This included extending the first phase of the production adjustments by a further month, now till 31 July 2020, and subscribing to the concept of compensation by those countries who were unable to reach full conformity (100 per cent) in May and June, to accommodate the underperformed volumes in July, August and September, in addition to their already agreed production adjustment for such months.
The Committee took note of the overall conformity of 87 per cent for the month of May 2020. It also observed individual country conformity levels and reiterated the critical importance that all Participating Countries achieve their 100% level, and make up for any monthly shortfalls in the months of July, August and September. It welcomed the expressed commitments from those countries below the 100 per cent May conformity level and specific compensation plans highlighting how this will be accommodated, and delivered, between July and September.
The Committee emphasized the critical importance of adhering to full conformity, and compensating the overproduced volumes in the months of May and June, during the months of July, August and September 2020, in accordance with the Statement of the 11th OPEC and non-OPEC Ministerial Meeting of the DoC (6 June 2020), in particular with reference to the five elements agreed.
The Committee would like to thank those participants, namely Iraq and Kazakhstan, which have already submitted their compensation schedules, and agreed to give other underperforming participants, which have not yet submitted final plans, until next Monday 22 June 2020 to submit their schedules for compensation to the OPEC Secretariat.
Furthermore, the Committee mandated the Secretariat to reach out to all the underperforming Participating Countries to submit their schedules for compensation by the above mentioned date.
The Committee stressed that the attainment of 100 per cent conformity from all Participating Countries is not only fair and equitable, but vital for the ongoing and timely rebalancing efforts and helping deliver a sustainable oil market stability.
The Committee stated their appreciation of additional voluntary contributions totaling 1.2 million barrels per day ( mbpd) made by Saudi Arabia, the UAE, Kuwait and Oman in the month of June 2020.
The Committee thanked the JTC and the OPEC Secretariat for its ongoing work. The JTC and the JMMC will continue their monthly meetings, with the next ones scheduled for 14 July and 15 July, respectively.
