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(OPEC +) decides to gradually increase oil production as of next May

02-04-2021

The Organization of Petroleum Exporting Countries (OPEC) and its allies within the (OPEC +) group decided today, Thursday, to increase their levels of oil production as of next May. This came in a statement issued by the (OPEC) General Secretariat at the end of the 15th ministerial meeting between the organization and its allies, or what is known as the (OPEC +) alliance, which was held via video communication technology. The statement said that the members of the committee agreed to withdraw from the voluntary reduction in oil production that they took last year to contain the consequences of the (Corona emerging - Covid 19) virus and start pumping more oil, but gradually. The statement indicated the agreement to adjust production levels for May, June and July 2021 while continuing to adhere to the mechanism agreed upon at the OPEC + ministerial meeting in December of last year. According to the statement, it was emphasized to hold monthly ministerial meetings for (OPEC +) to assess market conditions and decide on adjustments to the level of production for the following months, so that each adjustment does not exceed 500 thousand barrels per day. The ministers reviewed the monthly report prepared by the Joint Technical Committee, which includes crude oil production data for the month of February, and acknowledged the improvement that has occurred in the market thanks to the global vaccination programs against the new Corona virus - Covid 19 and the incentives for major economies. However, (OPEC +) ministers indicated in their closing statement that the fluctuations observed in recent weeks call for a cautious and vigilant approach in monitoring market developments. The OPEC + ministerial meeting noted a decline in February in oil inventories in the OECD countries for the seventh month in a row, but these cuts remained higher than the average recorded in (2015-2019). The meeting welcomed the positive performance of the participating countries, as the overall compliance rate reached 115 percent in February 2021, which reinforces the orientation of the participating countries towards high total compliance. The ministers indicated that (OPEC +), since the April 2020 meeting, has contributed to adjusting the global oil supply by 2.6 billion barrels of oil by the end of February 2021, which led to an acceleration of the rebalancing of the oil market. In their closing statement, the (OPEC +) ministers appreciated the cautious policy pursued by the Kingdom of Saudi Arabia in maintaining additional voluntary adjustments amounting to one million barrels per day for the third month in a row until this month. For his part, Saudi Energy Minister Prince Abdulaziz bin Salman, who chaired the OPEC + alliance meeting with Deputy Prime Minister and Russian Energy Minister Alexander Novak, confirmed during a press conference that the kingdom will reduce its voluntary cuts by 250, 350 and 400 thousand barrels per day in May, June and July, respectively. Prince Abdulaziz also indicated that no talks have taken place yet with consumers, stressing that no one is pressuring (OPEC +), saying, "We want to reduce oil stocks to the 2015-2019 average."