LONDON, Aug 20 — Opec ministers stuck to an agreement to lower oil production at a monthly meeting yesterday, underlining that only strict compliance could restore stability to prices undermined by the coronavirus pandemic.
Ahead of a virtual meeting of Opec and non-Opec producers, Russian Energy Minister Alexander Novak had welcomed data showing producers had by July implemented 95 per cent of the cuts agreed.
Following the meeting, the oil cartel said in a statement that figure was as high as 97 per cent if Mexico was included, welcoming “significant performance in overall conformity”.
Nevertheless, “100 per cent conformity from all participating countries... and compensating for the shortfalls in May, June and July 2020 is not only fair, but vital for the ongoing rebalancing efforts and to help deliver long-term oil market stability,” it added.
The coronavirus pandemic slammed the global economy earlier this year, plunging oil prices into unprecedented negative territory before top exporters Saudi Arabia and Russia agreed to put aside their differences and make common cause to halt the slide.
Now, “there are some signs of gradually improving market conditions,” Opec said.
“Nevertheless, the pace of recovery appeared to be slower than anticipated with growing risks of a prolonged wave of Covid-19,” it added, highlighting oil market “fragility... and significant uncertainties”.
Algerian Energy Minister Abdelmadjid Attar said Nigeria and Iraq were two laggards in implementing their share of cuts, news agency APS reported.
“We have to ensure the total respect of the Opec+ accord,” Russia’s Novak had said earlier.
Saudi Energy Minister Abdulaziz bin Salman — half brother to de facto Saudi ruler, Crown Prince Mohammed bin Salman — had hailed “significant improvement in the fundamentals of the global oil markets” over the past three months.
“We see encouraging signs that energy demand is recovering, as economies continue to re-open in many parts of the globe,” he said in opening remarks to the meeting.
But he added that he hoped stragglers would catch up by the end of September.
In its statement, Opec said “underperforming” countries must submit plans for how they will compensate for their overproduction by August 28. — AFP