The Organisation of the Petroleum Exporting Countries (OPEC) has called on oil producing countries to maintain the stability of the global oil market in the light of emerging realities of the global economy.
The need to balance and stabilise the oil market was top of the resolutions at the 12th OPEC and non-OPEC Ministerial Meeting (ONOMM) held via videoconference, on Thursday.
The Meeting reaffirmed the continued commitment of the participating producing countries in the Declaration of Cooperation (DoC) to a stable market, the mutual interest of producing nations, the efficient, economic and secure supply to consumers, and a fair return on invested capital.
The Meeting recalled the decision taken by all participating countries in the DoC at the 10th (Extraordinary) ONOMM on 12 April 2020 to adjust downwards overall crude oil production and the unanimous decisions taken at the 11th ONOMM on 6 June 2020.
It welcomed the positive performance in overall conformity levels to the production adjustments since it last met in June, and the constructive response from many countries to the compensation mechanism in accommodating their underperformed volumes as agreed at the June ministerial meetings, and later amended in September 2020.
Looking ahead, the Meeting emphasised that it was vital that DoC participants, and all major producers, remain fully committed to efforts aimed at balancing and stabilising the market. It noted that renewed lockdowns, due to more stringent COVID-19 containment measures, continue to impact the global economy and oil demand recovery, with prevailing uncertainties over the winter months.
In light of the current oil market fundamentals and the outlook for 2021, the Meeting agreed to reconfirm the existing commitment under the DoC decision from 12 April 2020, then amended in June and September 2020, to gradually return 2 mb/d, given consideration to market conditions.
Beginning in January 2021, DoC participating countries decided to voluntary adjust production by 0.5 mb/d from 7.7 mb/d to 7.2 mb/d.
Also, DoC participating counties agreed to hold monthly OPEC and non-OPEC ministerial meetings starting January 2021 to assess market conditions and decide on further production adjustments for the following month, with further monthly adjustments being no more than 0.5 mb/d.
The Meeting also agreed to extend the compensation period established from the 11th ONOMM, and later amended in September 2020, for the period of January until the end of March 2021, to ensure full compensation of over production from all DoC participating countries.