The Organisation of Petroleum Exporting Countries (OPEC)
and the broader OPEC+ group do not see any need to propose a change to the
current oil production policy when the Joint Ministerial Monitoring Committee
(JMMC) meets next week, according to delegates, commodity analyst Giovanni
Staunovo yesterday.
OPEC+ members have collectively decided to voluntarily
cut 2.2 million barrels per day (bpd) from the group’s production this quarter,
although much of that were production cuts that were already in effect,
including Saudi Arabia’s 1 million bpd voluntary cut.
In early March, the members of the OPEC+ alliance that
had pledged the Q1 cuts announced they would roll over the supply reductions
until the end of the second quarter.
Saudi Arabia, Iraq, the United Arab Emirates, Kuwait,
Kazakhstan, Algeria, Oman, and Russia are now cutting their respective crude
oil production and exports in the first half of 2024 with extra voluntary
reductions, on top of the voluntary cuts OPEC+ previously announced in April
2023 and later extended until the end of 2024.
When the OPEC+ members announced on March 3 their
intentions to extend the cuts into the second quarter, Russia changed its
production/export cut plan and said that in the second quarter it would reduce
supply by 471,000 bpd in the form of cuts to oil production and exports. In
April, Russia will reduce production by 350,000 bpd and exports by 121,000 bpd.
In May, the 471,000 bpd reduction would be in the form of a 400,000-bpd cut to
production and 71,000 bpd cut to exports, and in June the Russian supply cut would
be 471,000 bpd entirely from production reductions.
The production estimates for February have shown that
some of OPEC+ members – especially Iraq and Kazakhstan – continued to
overproduce above their respective quotas.
In the middle of February, both Iraq and Kazakhstan
pledged to comply with the cuts they had announced.
OPEC’s second-largest producer, Iraq, is committed to
its voluntary cut in the OPEC+ agreement and will produce no more than 4
million bpd of crude oil, Iraq’s Oil Minister Hayan Abdel-Ghani said in
February.
Non-OPEC oil producer Kazakhstan, for its part, vowed to
compensate over the coming months for a lack of compliance with the cuts in
January.
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