OPEC: Participating countries conclude successful year with record-breaking conformity level
The OPEC/Non-OPEC Joint Ministerial Monitoring Committee (JMMC) convened in Muscat, the Sultanate of Oman, for its seventh meeting, on 21 January 2018. It announced that, based on the Report of the Joint Technical Committee (JTC) for the month of December 2017, following continuous months of excellent performances, OPEC and participating non-OPEC countries have achieved a record-breaking conformity level of 129% with their voluntary production adjustments. The monthly average conformity level for the first year of the Declaration of Cooperation was a remarkable 107%.
The JMMC was established following OPEC’s 171st Ministerial Conference Decision of 30 November 2016, and the subsequent Declaration of Cooperation made at the joint OPEC-Non-OPEC Producing Countries’ Ministerial Meeting held on 10 December 2016 at which 11 (now 10) non-OPEC oil producing countries cooperated with the 13 (now 14) OPEC Member Countries in a concerted effort to accelerate the stabilization of the global oil market through voluntary adjustments in total production of around 1.8 million barrels per day. The resulting Declaration, which came into effect on 1 January 2017, was for six months. The second joint OPEC-Non-OPEC Producing Countries’ Ministerial Meeting, held on 25 May 2017, decided to extend the voluntary production adjustments for another nine months commencing 1 July 2017. At the third joint OPEC-Non-OPEC Producing Countries’ Ministerial Meeting, held on 30 November 2017, it was agreed to amend the Declaration of Cooperation so that it will take effect for the entirety of 2018.
Across a broad range of indicators, the first year of the Declaration of Cooperation has been a great success. In December 2017, OPEC and participating non-OPEC producing countries achieved an excellent conformity level of 129%, the highest since the start of the Declaration of Cooperation. This high conformity level has been validated by a diverse range of reporting agencies and media outlets.
Conformity levels have increased on a monthly basis, from 87% in January to the outstanding current level. Once more, the unwavering resolve of participating countries to rebalance the market has been amply demonstrated. The JMMC expressed satisfaction with the overall results and urged all participating countries to continue and, to the extent possible, intensify their collective and individual efforts, in the interests of bringing stability to the oil market. The JMMC will strive to maintain or exceed full conformity by all participating countries, throughout 2018.
The JMMC noted with satisfaction that the market had responded positively to the concerted actions of participating countries, to the benefit of producers, consumers and the global economy alike. Recent data confirmed that global oil demand growth will continue on a positive trajectory in 2018, buoyed by the strong performance of the global economy.
This stellar performance by participating countries in 2017 launches the new year on an extremely positive footing, preparing the path for further successes in 2018.
The JMMC also thanked His Majesty, Qaboos bin Said Al Said, the Sultan of Oman, for his gracious hospitality, as well as paying tribute to all involved from the Sultanate of Oman for the excellent arrangements for the meeting.
The next JMMC Meeting is scheduled to be held in April 2018 in Saudi Arabia.