OPEC + launched a record production cut of 9.7 million bpd in May in response to collapsing demand during the pandemic. The cuts are reduced to 7.7 million bpd on August 1, a month later than originally planned. Non-compliant members have pledged to compensate for their poor compliance between May and July with further reductions in August and September.
The internal document that Reuters saw does not explain in detail how these additional cuts would be distributed in August and September. OPEC + estimates show Iraq was overproducing at a rate of 851,000 bpd between May and July – it was the least compliant member of the pact. Iraq has pledged to cut a lot more to make up for poor compliance, but its July production rose 39,000 b / d to an average of 3.752 million b / d, according to the latest monthly oil market report (MOMR ) of OPEC.
Nigeria also significantly overproduced between May and July, pumping 315,000 bpd above its cap, according to the OPEC + document seen by Reuters.
Russia, leader of the non-OPEC group in the OPEC + coalition, was also producing above its quota – 283,000 bpd more than it would need to be to be in full compliance.
Related: Saudi Petroleum Minister: Oil Demand May Recover 97% By End of 2020
The Joint Ministerial Monitoring Committee (JMMC), which met on Wednesday, said it had asked other poorly performing participating countries to submit their plans for implementing the required compensation for overproduced volumes to the Secretariat of the ‘OPEC by the end of next week, August 28.
The Committee emphasized that achieving 100% compliance by all DoC participating countries and compensating for shortfalls in May, June and July 2020 was not only fair, but vital for ongoing rebalancing efforts and for help ensure the long-term stability of the oil market. OPEC said at the end of the video meeting.
The OPEC + panel also admitted that “the pace of the recovery appeared to be slower than expected with the growing risks of a prolonged wave of COVID-19.”
By Tsvetana Paraskova for OilUSD
More Most Popular Readings From Oiluka: