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OPEC+ will do better with production cuts deal, oil ministers say

Key OPEC ministers promised to do better with their production cuts deal, with Saudi Arabia’s new energy minister saying the next OPEC meeting is the placeto discuss changing that agreement.

“One thing I can report is that there is a clear-cut readiness to be responsible and responsive,” Prince Abdulaziz, the new Saudi energy minister, said Thursday after a meeting of the Joint Ministerial Monitoring Committee, tasked with reviewing the cuts deal. He said Saudi Arabia will keep its production below 10 million b/d in October, at 9.89 million b/d. The kingdom has already been overcomplying with its cut commitment under the 1.2 million b/d OPEC and non-OPEC production cut agreement that is scheduled to run through March 2020.

“The agreement is that those who did not comply will comply fully, so we are going to get a deeper cut,” Oman’s oil and gas minister, Mohammed al-Rumhy said after the meeting.

Compliance with the cuts was 136% in August, the JMMC said. “All participating countries, particularly those who are yet to reach full conformity with their adjustments, were unequivocal in providing steadfast assurance of their determination to achieve at least 100% conformity.” While OECD commercial oil stocks have recently declined, they still remain above the five-year average, it said.

Nigeria and Iraq ministers said their production will decline in September and October from August levels. “I reiterate our commitment to the voluntary levels we committed to in December,” Russia’s energy minister Alexander Novak said.

Iran was not discussed, Rumhy said. “Things like Bolton are all rumors and we really don’t know what the impact will be.” US president Donald Trump dismissed Iran hardliner John Bolton this week, leading to speculation that the US could ease sanctions limiting oil exports on Iran.

Nigeria’s energy minister, Emmanuel Ibe Kachikwu said the country is producing 56,000 b/d over its commitment. “We’re going to cut 50% of that in September, and then 100% in October,” he said. “And then maybe we might join the club with even more for us later.”

“I have already actioned cuts in production and exports level as of today,” Iraq’s oil minister Thamir Ghadhban said. “September will be significantly lower than those that were exhibited in August. Deeper cuts will also be introduced as of October 1 in order to reach full conformity.”

Iraq produced a record 4.88 million b/d in August, according to the Platts OPEC survey. That is far above its quota of 4.51 million b/d.
Source: Platts

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