Output Cuts: OPEC+ Records 97% Compliance in July

By Adedapo Adesanya

The Organisation of the Petroleum Exporting Countries and its allies known as OEPC+ achieved 97 per cent compliance with the production cuts obligations in July.

In April 2020, the group signed a two-year production output restraint deal to be executed in stages. The agreement became effective from May 1, 2020.

The group had a target to remove 9.7 million barrels per day of production last month, largely from an October 2018 baseline. With this, the coalition will now strive to lower production by 7.7 million barrels per day from that same base in the August-December period.

Countries that exclusively belong to OPEC reached 95 per cent conformity while their non-OPEC counterparts achieved 96 per cent compliance.

Delegates at the OPEC+ Joint Technical Committee (JTC), which studies market conditions that inform the OPEC+ production strategy disclosed this vital information on Monday.

A ministerial OPEC+ monitoring committee, known as the JMMC, is meeting on Wednesday to review the oil market and compliance with the global oil supply reduction pact. The JMMC advises the whole of OPEC+ and does not make decisions.

OPEC+ sources said the JTC was not discussing any changes in the current production agreement but was focusing on adherence by countries such as Iraq, Nigeria and Kazakhstan, which have pledged to improve their compliance.

The JTC and JMMC assemblies have become monthly fixtures, part of the new OPEC+ initiative that requests countries that produced in excess of their quotas in previous months to contribute with additional cuts in the short term.

Meanwhile, the price of OPEC basket of 13 crudes stood at $44.94 a barrel on Monday, compared with $44.62 the previous Friday, according to OPEC Secretariat calculations released on Tuesday.

The OPEC Reference Basket of Crudes (ORB) is made up of the following: Saharan Blend (Algeria), Girassol (Angola), Djeno (Congo), Zafiro (Equatorial Guinea), Rabi Light (Gabon), Iran Heavy (Islamic Republic of Iran), Basra Light (Iraq), Kuwait Export (Kuwait), Es Sider (Libya), Bonny Light (Nigeria), Arab Light (Saudi Arabia), Murban (UAE) and Merey (Venezuela).