OPEC and the broader OPEC+ group do not see any need to propose a change to the current oil production policy when the Joint Ministerial Monitoring Committee (JMMC) meets next week, according to delegates, commodity analyst Giovanni Staunovo reported on Monday.
OPEC+ members have collectively decided to voluntarily cut 2.2 million barrels per day (bpd) from the group’s production this quarter, although much of that was production cuts that were already in effect, including Saudi Arabia’s 1 million bpd voluntary cut.
In early March, the members of the OPEC+ alliance that had pledged the Q1 cuts announced they would roll over the supply reductions until the end of the second quarter.
Saudi Arabia, Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria, Oman, and Russia are now cutting their respective crude oil production and exports in the first half of 2024 with extra voluntary reductions, on top of the voluntary cuts OPEC+ previously announced in April 2023 and later extended until the end of 2024.
When the OPEC+ members announced on March 3 their intentions to extend the cuts into the second quarter, Russia changed its production/export cut plan and said that in the second quarter it would reduce supply by 471,000 bpd in the form of cuts to oil production and exports. In April, Russia will reduce production by 350,000 bpd and exports by 121,000 bpd. In May, the 471,000 bpd reduction would be in the form of a 400,000-bpd cut to production and 71,000 bpd cut to exports, and in June the Russian supply cut would be 471,000 bpd entirely from production reductions.
The production estimates for February have shown that some of OPEC+ members – especially Iraq and Kazakhstan – continued to overproduce above their respective quotas.
In the middle of February, both Iraq and Kazakhstan pledged to comply with the cuts they had announced.
OPEC’s second-largest producer, Iraq, is committed to its voluntary cut in the OPEC+ agreement and will produce no more than 4 million bpd of crude oil, Iraq’s Oil Minister Hayan Abdel-Ghani said in February.
Non-OPEC oil producer Kazakhstan, for its part, vowed to compensate over the coming months for a lack of compliance with the cuts in January.
By Charles Kennedy for Oilprice.com
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