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Ministers of OPEC Plus countries agree on a gradual increase in production, starting from January

04-12-2020

The Oil Ministers of the OPEC Plus alliance agreed on Thursday, to adopt a gradual increase in production by half a million barrels per day, starting from next January. In the final statement of the 12th OPEC and Independent Producers OPEC Plus ministerial meeting, the Ministers affirmed their countries' commitment to establishing a stable market, ensuring the common interests of producing countries, effective, economic and safe supply to consumers, and a fair return on invested capital. As of January 2021, the countries of the OPEC Plus alliance decided to amend the production cut quotas by 500,000 barrels per day which means from 7.3 million barrels to 7.2 million barrels. The attendees welcomed the positive performance in the overall conformity levels of production adjustments since their last meeting in June and the constructive response from many countries to the compensation mechanism in absorbing their underperforming volumes as agreed in the Ministerial meetings in June and which was amended last September. Looking ahead, the meeting stressed that it is necessary for the participants in the production cut agreement to remain fully committed to the efforts aimed at achieving balance and stability in the market. The statement indicated that the renewed closures due to the stricter measures to contain the virus (Covid 19) continue to affect the global economy and the recovery of oil demand with the uncertainty prevailing during winter months. The meeting agreed to reconfirm the current commitment under the OPEC Plus decision issued on April 12, which was amended in June and September 2020 to gradually return by two million barrels per day, taking the market conditions into account. It was also agreed to hold monthly Ministerial meetings of the Organization of the Petroleum Exporting Countries (OPEC) and beyond, starting from January 2021, to assess market conditions and to decide on additional production adjustments for the following month with other monthly adjustments not exceeding 500,000 barrels per day. The participating countries called on Saudi Energy Minister Prince Abdulaziz Bin Salman to continue his role as chairman of the Joint Ministerial Committee concerned with monitoring the production cut agreement, where they praised his efforts and perseverance in combating the effects of the Corona pandemic and in achieving oil market stability through the successful implementation of the objectives of the production cut agreement. Accordingly, Prince Abdulaziz Bin Salman agreed to continue in his role as chair of the Ministerial meeting and pledged to strive vigorously to achieve sustainable stability in the oil market. The meeting participants also expressed their sincere appreciation and gratitude to the Russian Energy Minister Alexander Novak for his exemplary leadership as co-chair of the OPEC Plus alliance and requested him to continue in his position and thanked him for his tireless efforts and strong support for managing the match during these extremely difficult times. The ministers stressed the importance of the fourth anniversary of the signing of the establishment of the OPEC Plus alliance between producers from inside and outside (OPEC) on the tenth of December 2016 and praised the continued commitment of the participating countries to the principles of the alliance.